Mechanistic and Organic Organizational Structures, Informal Organizations, Line and Staff Organizations

Mechanistic and Organic Organizational Structures

The five structural factors just discussed give rise to numerous organizational possibilities. Mechanistic and organic structures are two possibilities at opposite ends of the organizational spectrum. They give shape to the concept of the factors of organizational structure. A mechanistic organization is characterized by the following structural factors:

. Degree of work specialization is high.

. Departmentalization is rigid.

. Managerial hierarchy has many layers.

. Span of control is narrow.

. Decision making is centralized.

. Chain of command is long.

. Organizational structure is very tall.

An organic organization is characterized by the following factors:

. Degree of work specialization is low.

. Departmentalization is loose.

. Managerial hierarchy has few layers.

. Span of control is wide.

. Decision making is decentralized.

. Chain of command is short.

. Organizational structure is flat.

Informal Organizations

A formal organizational structure, represented by an organizational chart or written job descriptions, is not the only structure that exists within an organization. Between different departments and levels of hierarchy, various informal organizations exist within an organizational structure. An informal organization consists of a network of channels of communication based on informal relationships between individuals within a firm. These networks are often based on friendships and social contacts. In addition to providing information and a sense of control over the work environment, they can also be a source of recognition and status. Informal organizations can be examined more closely through social network analysis. This process maps the social relationships between individuals within an organization. Once they are recognized and understood, informal organizations can be utilized within an existing organizational structure in order to increase communication and overall effectiveness and efficiency.

Line and Staff Organizations

The factors related to organizational structures also help describe different positions for individuals within a firm. Two examples of this are line positions and staff positions. Organizational structures often involve the interrelation between these two types of positions.

Line positions are directly related to the production of goods and services. They are common in firms that involve production, manufacturing, or providing financial services.

Staff positions are supportive in nature, helping those in line positions and top management more effectively achieve the firm’s goals and objectives. Staff positions provide, for example, legal, public relations, human resources, and technology support services.

Five Structural Factors

Whether you are in the beginning stages of starting your own business or you are looking for ways to improve an existing business, it is important to think about the firm’s organizational structure. Examining organizational structure will help answer questions about the ways in which a firm conducts business. Who is responsible for accomplishing various tasks within the firm? How are these individuals grouped? Who manages these individuals or groups? How do they manage them?

Five Structural Factors

In essence, the primary goal of an organizational structure is to coordinate and allocate a firm’s resources so that the firm can carry out its plans and achieve its goals and objectives. The fundamentals of organizational structure revolve around five factors: the division of labor, departmentalization, the nature of the managerial hierarchy, the managerial span of control, and the amount of centralization or decentralization in the organization.

Division of Labor. The division of labor involves two steps: dividing work into separate tasks and assigning these tasks to workers. What are the different tasks carried out by your firm? Who is responsible for accomplishing these tasks?


Departmentalization. Departmentalization is the process of grouping similar types of jobs together so that they can be accomplished more efficiently and effectively. There are five different ways in which to departmentalize business activities. Different types of departmentalization can exist to varying degrees within a business. What types of departmentalization exist within your firm? Could your firm be departmentalized differently?

1. Function. An example of functional departmentalization would be a firm that has a marketing and finance department. It involves grouping tasks based on the function that the organizational unit accomplishes within a firm.
2. Product. A consumer electronics firm that has separate departments for camera and MP3 players is using product-based departmentalization. In this case departments are based on the
goods or services that an organizational unit sells or provides.
3. Process. A manufacturing firm that includes separate departments for assembly and shipping is an example of a firm with process-based departmentalization. In this case departmentalization revolves around the production process used by the organizational unit.
4. Customer. A bank with separate departments for its business
customers and individual customers is using customer-based departmentalization. Its departmentalization is based on the type of customer served.
5. Geographic. An example of a firm using geographic departmentalization is an automobile manufacturing company that has different departments for each country in which it sells cars. In this case departmentalization is based on the geographic segmentation of organizational units.

Managerial hierarchy relates to the way in which management is layered. It usually includes three levels—upper or top management, middle management, and supervisory roles. The higher levels of management generally have fewer employees, but more power.


Span of Control. Span of control is closely related to managerial hierarchy. At each level of management within a firm an individual is responsible for a different number of employees. Span of control relates to the number of employees that a manager directly supervises. Span of control is determined by a number of factors, including the type of activity, the location of the workers, a manager’s ability to delegate tasks, the amount and nature of communication between the manager and the individuals being supervised, and the skill level and motivation of the individuals being supervised.

Centralization versus Decentralization. Centralization is the degree to which formal authority is centralized within a unit or level of an organization. Decentralization is the process of actively shifting authority lower in a firm’s hierarchical structure. This effectively gives more decision-making power and responsibility to those in supervisory roles. Centralization and decentralization have their benefits and costs. While centralization provides top-level managers with a better overview of operations and allows for tighter fiscal control, it can result in slower decision making and limit innovation and motivation. Decentralization, by contrast, can speed up decision making and increase motivation and innovation, but this is done at the expense of a top manager’s view of the firm and financial control.

Flexible Work Schedules, Employee Involvement Programs, Measuring Job Satisfaction

Flexible Work Schedules

In today’s time-pressed world, many employees view time away from work as an important factor shaping their at-work motivation and on-job productivity. There are several methods for allowing flexible work schedules that meet the needs of employees seeking greater home/work flexibility. One of the more common is a compressed workweek. This system lets an employee work the same number of hours over the course of fewer days. Instead of working five eight-hour days, an employee might work four ten-hour days. Other examples of flexible work schedules include job sharing where two or more people share a certain work schedule.

Employee Involvement Programs

Employee involvement programs seek to motivate employees by increasing their responsibilities or getting them more involved in decision-making processes. There are several types of employee involvement programs; the more basic programs include job enlargement, job rotation, and teamwork. More ambitious programs include open-book management and worker empowerment.

Job Enlargement. Job enlargement is a direct way to increase job responsibility. It involves expanding a position and giving an employee a greater variety of tasks.

Job Rotation. A job rotation program periodically reassigns employees to new positions. In addition to increasing employees’ involvement in the firm and adjusting their responsibilities, job rotation can also improve employees’ skill sets, thereby increasing their job security. In addition, it can also relieve the boredom in the workplace associated with doing the same job over a long period of time.


Teamwork. This program attempts to increase motivation by putting individuals with different positions onto a team and setting them the task of achieving a specific goal. Teamwork serves to increase an employee’s responsibilities and involvement in the firm. The best types of teams are self-directed. This provides the team with the authority to make decisions regarding planning, accomplishing, and evaluating the task they are working on.

Open-Book Management. Open-book management is a challenging, but direct way of increasing employee involvement and responsibility. It involves allowing employees to see how their job performance affects key performance indicators important to the firm. In order to institute this program a firm needs to make key indicators available to employees and educate them on how to interpret key performance measures. Employees also need to be empowered to make decisions related to their positions and training and be given the opportunity to see how these decisions affect the rest of the firm. Open-book management also necessitates an adequate compensation program whereby compensation is tied to performance.

Worker Empowerment. Worker empowerment attempts to increase employee job responsibility as well as employee involvement. It does this by giving employees more authority and involving them in the decision-making process. Employees who are empowered can often make better and more informed decisions than can a manager who is not directly involved in the process. Participative management is similar to worker empowerment. Although it does not provide employees with direct decision-making power, it encourages managers to consult closely with workers before making decisions. Another type of participatory management is management by objective. This approach allows employees to set their own goals and provides them with the freedom to decide how they can best achieve these goals.

Measuring Job Satisfaction

How do managers know that after gaining an understanding of the theories of motivation and applying different approaches to increase job satisfaction that their efforts have been successful? In practice a manager must draw conclusions on a daily basis from social observations and interactions in the workplace. Sometimes, however, it is a good idea to conduct a more formal survey. This can be accomplished through either interviews, surveys, or focus groups that often involve only a specific group of employees. Two useful surveys are the Minnesota Satisfaction Questionnaire and the Job Descriptive Index. Both of these surveys address areas of employee satisfaction in regard to different aspects of an organization and provide managers with useful information. They cover work, working conditions, rewards, opportunities for advancement, and the quality of relationships with managers and coworkers.