Organizational structure affects productivity and may vary based on company size and industry. Understaffed companies may require employees to perform multiple tasks, while functional environments provide clarity and repetition for job roles. Small companies may adopt a flat structure, while matrix structures promote teamwork and creativity.
Organizational structure and performance share a relationship in which the former can dictate or at least affect productivity. Different structures may be more appropriate for companies based on the size of an entity or the industry in which a company operates. Employees often become a product of the organizational structure practiced in a company and begin to behave and operate in ways that ideally reflect and support the structure implemented by employers.
Understaffed companies may require individuals to wear many hats, i.e. perform multiple tasks associated and non-job associated. It may be so that a company continues to operate as if it has a full staff, even if it doesn’t. This is not the case in a company that has a functional organizational structure.
A functional environment is one in which individual employees are given specific tasks under the umbrella of a division with a broader organizational purpose. These individuals are expected to function within defined parameters. While there may always be a plausibility for cross-divisions, as projects come up and individuals lose work, job roles and functions remain segregated and defined. The link between organizational structure and performance here is that employees are likely to become increasingly proficient at their jobs because of the clarity and repetition assigned to tasks. Additionally, individuals may have little recourse if productivity lags because objectives are clear as implemented by the employer.
A small company is more likely to adopt a flat organizational structure. This is partly due to practicality, as this type of environment is shaped by a somewhat limited staff. Employees generally work under the direct leadership of the business owner or operator, as opposed to being managed by departmental or middle management executives. In this scenario, organizational structure and performance are linked because employees know that top management knows individual performance. This could affect productivity in a positive way and inspire co-worker participation.
In a matrix organizational structure, there is less formality in the roles associated with jobs. Companies that create this environment are likely to promote teamwork and the blending of different office divisions for one purpose. Organizational structure and performance are linked in this scenario, as employees are incentivized or rewarded for demonstrating entrepreneurial spirit and creativity in working together to complete a given goal. Conflicts can arise in team environments if employees resist different management styles from individuals in external departments.
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