Question

Compare and contrast traditional and contemporary organizational designs.

Answer 1

In ia itraditional icompany, ithe ipower iflows ifrom itop ito ibottom; irank-and-file iworkers iare iviewed ilike icogs iin ithe iorganization iand imust iimplement idecisions ifor iwhich ithey ihad ino iinput. iBut ia icultural ichange iin ithe iworkplace ihas iupended ithe itenets iof ia itraditional icompany iand iintroduced ia icontemporary iorganizational istructure ithat iis imarkedly idifferent. iAnd iwhile imany ibusinesses istill ioperate ia itraditional icompany ithat iprovides icontrol iand istability, ithe icontemporary iorganizational idesign iin iwhich iemployees iare igiven ipower iand iautonomy ito imake idecisions iand iimplement ichanges i iis ibecoming imore ipopular.

Traditional iOrganizational iStructure iElements

If ia itraditional iorganizational istructure iwere idepicted iwith ia ichart, iit iwould ilook ilike ia ipyramid. iAt ithe itop iof ithat ipyramid iare ithe iCEO, ipresident iand isenior imanagement. iIn ithe imiddle iof ithe ipyramid iare imiddle imanagers iand ilower-level imanagers, iand iat ithe ibroad ibase iare iemployees. iIn ithis istructure, ithe itop ilevel iof ithe ichart imakes iall ithe imajor idecisions, iwhich iare icommunicated ito imid-level iand ilow-level imanagement. iThese imanagers imust ithen iimplement ithe idecisions iamong ithe irank-and-file iworkers. iLittle ito ino iinput iis irequired ior isolicited ifrom iemployees, iand iultimate iauthority irests iin ithe ihands iof ithose iat ithe itop iof ithe ichart.

For ismall istart-ups, ia itraditional istructure iis ioften ito ihave ialmost ino istructure. iThere's ione imanager, iwhich iis iyou, iand ione iproject iteam, iwhich iis ieveryone ielse. iIf ione iteam imember ineeds ihelp ifrom ianother, iit's ia imatter iof iwalking ia ifew ifeet iand iknocking ion isomeone's idoor.

Once ithat istart-up igrows ibeyond ithe iinitial iteam, iit irequires imore istructure. iThe itraditional iapproach iis ito idivide iup iemployees iby ifunction, icreating iseparate idepartments ior ibranches. iThis ileads ito ia ihierarchy iwhere ieach idepartment ihas iits imanager, iall iof iwhom ireport ito isomeone iover ithem; iif ithe icompany ikeeps igrowing, imore ibranches iand imore ilayers iof imanagement iresult.

A itraditional istructure imakes iit ieasier ito icentralize ipower iand ikeep icontrol ias iyour iorganization igrows. iIt's ialso icumbersome, ibecause iinformation iand idecisions ihave ito itravel ithrough ilayers iof imanagement. iIt's iimportant ito iconsider ithe ipros iand ithe icons iwhen iweighing itraditional iorganization ivs icontemporary iorganization.

Contemporary iOrganizational iStructure iElements

In ia icontemporary iorganizational istructure, ithe irigid itop-down imodel iof ithe itraditional istructure iis iremoved iin ifavor iof iteams ithat iwork ion iprojects itogether. iInstead iof irelying ion isenior imanagement ito idrive ithe iwork iprocess, ithe icontemporary iorganizational idesign iis iall iabout iempowering iemployees ito imake idecisions iand iimplement ichanges iwithout ineeding ithe iapproval iof isupervisors. iIn ithis itype iof istructure, iemployees iare igiven ithe irequirements, imilestones iand iproductivity igoals iof imajor iprojects, iand imust idetermine ithe imost iefficient iway ito imeet ithose igoals. iThis istructure ieliminates ithe ivertical idesign iof ia itraditional icompany iand igives iemployees iownership iof ithe iwork ithey iperform.

Traditional iOrganizational iStructure iAdvantages iand iDisadvantages

The iprimary iadvantage iof ia itraditional iorganizational istructure iis ithat iit ikeeps idecision-making iand iauthority iin ithe ihands iof ia ifew ipeople iwithin ia ibusiness. iIn idoing iso iit ieliminates iconfusion iamong iemployees iabout iwho iis iin icharge iand iprovides ia iclear imessage iabout iwhat iworkers iare iexpected ito iaccomplish iin ithe iperformance iof itheir iduties. iThe itop-down istructure ican ibe ilikened ito ia imachine. iEvery ipart ihas ia ispecialized ipurpose, iand ithose iparts iare icoordinated ito iefficiently icreate ia ipredictable iand iconsistent iresult.

The imajor idisadvantage iof ithis istructure iis ithat iit’s ioften ian iauthoritarian isystem ithat idoesn’t igive iemployees ion ithe ibottom-rung iinput iinto imajor idecisions. iEmployees iare iexpected ito icarry iout iorders, iand itheir iideas ifor ibetter iways ito ido ithings iare ioften idisregarded.

Contemporary iOrganizational iStructure iAdvantages iand iDisadvantages

The imain iadvantage iof ia icontemporary iorganizational idesign iis ithat iemployees ihave ithe ifreedom ito iimplement itheir iown idecisions, imake ichanges iand itake iownership iof itheir iwork iwithout iinterference ifrom imiddle imanagement iand isenior imanagement. iThis ifreedom ican ilead ito iincreased iproductivity, igreater iwork iquality iand ia isignificant iuptick iin iemployee isatisfaction. iUnder ithis istructure, iemployees iform istronger ibonds, ibecause ithey imust irely ion ieach iother's iexpertise iand italent ito iaccomplish itheir igoals. iThere iis ioften ialso ia igreater ilevel iof icommunication iamong iworkers, ibecause ievery iemployee iis idependent ion ithe isuccess iof ianother iemployee.

The iprimary idisadvantage iof ia icontemporary iorganizational istructure iis ithat ithe iabsence iof isupervisory iauthority ican ilead ito idisorganization iand iinefficiency iif iemployees ifail ito ihold ieach iother iaccountable ifor imistakes. iAnother idisadvantage iis ithat ibecause ithe istructure iis ino ilonger itop-down ior ibottom-up, ithe iopportunities ifor iadvancement ior iupward imobility iare ilimited, isince ithe iorganization inow iworks ias ia i“flatter” istructure iin iwhich iworkers iare ion ian iequal ifooting.

Traditional iOrganization ivs. iContemporary iOrganization

1. Level iof iControl

The itraditional iorganizational istructure iis ia ipyramid iwith ia ichief iexecutive iat ithe itop. iThe iCEO idelegates isome iof ihis iauthority ito iimmediate isubordinates iwho, iin iturn, ihave iseveral ilayers iof imanagers ireporting ito ithem. iThe istructure iis isimple, iand ithe ilines iof iauthority iare iclear. iThis istructure iworks iwell iwhen ichallenges iat ithe iworking ilevel iare ipredictable, ibut iit iis iinflexible iwhen ia iworking-level iemployee iencounters iunexpected isituations. iThe iemployee ihas ito iwait ifor iinstructions iand idoesn't ihave ithe iauthority ito imake idecisions. iA icontemporary istructure iempowers iworking-level iemployees, ireduces icentralized icontrol iand iholds iall iorganizational ilevels iresponsible ifor itheir iown idecisions.

2. Flexibility

The icontemporary iorganization iachieves ithe iempowerment iof iworking-level iemployees iby iintroducing ihorizontal ielements iinto ithe iorganizational istructure. iInstead iof ihaving ia isingle imanager ias iin ia iformal ihierarchy, iemployees iin icontemporary iorganizational istructures ireport ito ione imanager ifor idisciplinary iissues iand iother imanagers ifor iwork iand iproduct-related imatters. iThis istructure iencourages ithe iformation iof iteams ithat imake itheir iown idecisions. iBy imoving isome iof ithe idecision-making idown ito ithe iworking ilevel, ithe icontemporary iorganizational istructure iachieves ia igreater iflexibility iin imeeting iexternal ichallenges.

3. Efficiency

While ithe icontemporary istructure iis imore iflexible, iit iis iless iefficient. iMaking idecisions ilower ion ithe iorganizational istructure imeans ithe icompany ihas ito idisseminate iinformation irequired ifor ithe idecisions iand ithe iimpacts iof ithe idecisions ithemselves ithroughout ithe iorganization. iAdditional ipersonnel ihave ito imake isure ithe iworking ilevel iemployees ihave ithe irequired idata iand iknow iabout ithe idecisions ibeing imade iby iother iteams. iThe iprice iof ithe iadditional iflexibility iis ithe icost iof ithe irequired icoordination.

4. Responsiveness

Flexibility iis ionly iuseful iif iit iresults iin ieffective iresponses. iCompanies ican iachieve isome iflexibility iwithin ithe itraditional iorganizational istructure, ibut ithe imanagers iand iexecutives imake itheir idecisions iat ia idistance ifrom iwhere ithe iwork iis ibeing icarried iout. iA icontemporary istructure ithat ihas ishifted idecisions ito ithe iworking ilevel iensures ithat ithe iemployees imost ifamiliar iwith ithe iwork imake ithe icorresponding idecisions. iThe idecisions irespond ito ithe irequirements iof ithe imarketplace iand ilet ithe icompany iquickly iadjust ito ichanging iconditions.