When is the last time you heard your leader discuss organizational culture with employees?
How does your organization know if the current organizational structure is optimal for today’s economy?
Is organizational theory taught in universities applicable today?
If you were to start a new organization today, what would be you organizational structure?
Current Organizational Theory is over 250 Years Old!
Physicists like Newton, Boyle and others gave the world scientific laws which engineers, architects and entrepreneurs applied to new products to begin creating a world of machines. These new products required large workforces and different organizational skills to create them.
The factories that emerged were designed using the same principles that designed the machines themselves, so companies became a product of different parts like departments, sections or the job descriptions that organize individual tasks. The theory was if every part worked correctly then the machine would work correctly.
Fifty years ago, factories could produce the same product for decades without needing to change, but our interconnected world has accelerated the speed of change and therefore the need for companies to adapt. Traditional companies are designed to produce the same results every time, just like a machine. They are not designed to be adaptable, flexible or subjective.
Below are 10 drawbacks to traditional organizational structures. Leaders need to always assess organizational structure and its relevance in the marketplace. Organizational structure could determine whether or not an organization is successful or not.
10 Drawbacks to Traditional Organizational Culture
- Slow to react to external/internal changes as systems are designed for stability
- Too many structural layers slow down and reduce communication effectiveness
- Authority Is maintained centrally, reducing the effectiveness of front-line staff
- Problems take too long to solve and keep recurring, wasting time and resources
- Purposes are often in conflict (Ex: finance wants to save – depts. need to spend)
- The structures and systems create problems by dividing and boxing people
- Most people are excluded from the decision-making and thinking processes thereby limiting potential to change and adapt quickly
- People are not involved or included in the purpose of the organization and feel apart from it rather than a part of it
- Failure is a greater focus than success
- The organization does not perform as well as it should or could
When building an organization, leaders must ensure that the structure is adaptable and flexible. By anticipating changes in the economy, trends in products and services an organization can develop a structure that is scalable for the future.
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