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Five Approaches to Organizational Design

Managers must make choices about how to group people together to perform their work. Five common
approaches — functional, divisional, matrix, team, and networking—help managers determine
departmental groupings (grouping of positions into departments). The five structures are basic
organizational structures, which are then adapted to an organization's needs. All five approaches
combine varying elements of mechanistic and organic structures. For example, the organizational design
trend today incorporates a minimum of bureaucratic features and displays more features of the organic
design with a decentralized authority structure, fewer rules and procedures, and so on.

Functional structure

The functional structure groups positions into work units based on similar activities, skills, expertise, and
resources (see Figure 1 for a functional organizational chart). Production, marketing, finance, and human
resources are common groupings within a functional structure.As the simplest approach, a functional
structure features well‐defined channels of communication and authority/responsibility relationships.
Not only can this structure improve productivity by minimizing duplication of personnel and equipment,
but it also makes employees comfortable and simplifies training as well.

But the functional structure has many downsides that may make it inappropriate for some
organizations. Here are a few examples:

The functional structure can result in narrowed perspectives because of the separateness of different
department work groups. Managers may have a hard time relating to marketing, for example, which is
often in an entirely different grouping. As a result, anticipating or reacting to changing consumer needs
may be difficult. In addition, reduced cooperation and communication may occur.

Decisions and communication are slow to take place because of the many layers of hierarchy. Authority
is more centralized.

The functional structure gives managers experience in only one field—their own. Managers do not have
the opportunity to see how all the firm's departments work together and understand their
interrelationships and interdependence. In the long run, this specialization results in executives with
narrow backgrounds and little training handling top management duties.

Divisional structure

Because managers in large companies may have difficulty keeping track of all their company's products
and activities, specialized departments may develop. These departments are divided according to their
organizational outputs. Examples include departments created to distinguish among production,
customer service, and geographical categories. This grouping of departments is called divisional
structure). These departments allow managers to better focus their resources and results. Divisional
structure also makes performance easier to monitor. As a result, this structure is flexible and responsive
to change.
However, divisional structure does have its drawbacks. Because managers are so specialized, they may
waste time duplicating each other's activities and resources. In addition, competition among divisions
may develop due to limited resources.

Matrix structure

The matrix structure combines functional specialization with the focus of divisional structure. This
structure uses permanent cross‐functional teams to integrate functional expertise with a divisional
focus.

Employees in a matrix structure belong to at least two formal groups at the same time—a functional
group and a product, program, or project team. They also report to two bosses—one within the
functional group and the other within the team.

This structure not only increases employee motivation, but it also allows technical and general
management training across functional areas as well. Potential advantages include

Better cooperation and problem solving.

Increased flexibility.

Better customer service.

Better performance accountability.

Improved strategic management.

Predictably, the matrix structure also has potential disadvantages. Here are a few of this structure's
drawbacks:

The two‐boss system is susceptible to power struggles, as functional supervisors and team leaders vie
with one another to exercise authority.

Members of the matrix may suffer task confusion when taking orders from more than one boss.

Teams may develop strong team loyalties that cause a loss of focus on larger organization goals.

Adding the team leaders, a crucial component, to a matrix structure can result in increased costs.

Team structure

Team structure organizes separate functions into a group based on one overall objective. These cross‐
functional teams are composed of members from different departments who work together as needed
to solve problems and explore opportunities. The intent is to break down functional barriers among
departments and create a more effective relationship for solving ongoing problems.The team structure
has many potential advantages, including the following:

Intradepartmental barriers break down.

Decision‐making and response times speed up.

Employees are motivated.

Levels of managers are eliminated.

Administrative costs are lowered.

The disadvantages include:

Conflicting loyalties among team members.

Time‐management issues.

Increased time spent in meetings.

Managers must be aware that how well team members work together often depends on the quality of
interpersonal relations, group dynamics, and their team management abilities.

Network structure

The network structure relies on other organizations to perform critical functions on a contractual basis.
In other words, managers can contract out specific work to specialists. This approach provides flexibility
and reduces overhead because the size of staff and operations can be reduced. On the other hand, the
network structure may result in unpredictability of supply and lack of control because managers are
relying on contractual workers to perform important work.

2. The concept of individual differences

Individuals bring a number of differences to work, such as unique personalities, values, emotions, and
moods. When new employees enter organizations, their stable or transient characteristics affect how
they behave and perform. Moreover, companies hire people with the expectation that those individuals
have certain skills, abilities, personalities, and values. Therefore, it is important to understand individual
characteristics that matter for employee behaviors at work.

3. Motivation Theories

Motivation is a state of mind, filled with energy and enthusiasm, which drives a person to work in a
certain way to achieve desired goals. Motivation is a force that pushes people to work with a high level
of commitment and focus, even if things are going against them. Motivation translates into a certain
kind of human behavior.  In short, motivation is the driving force behind human actions.

There are many different forces that guide and direct our motivations. It is important to ensure that
every team member in an organization is motivated and meets the best project management course
bottom line. Various psychologists have studied human behavior and have formalized their findings in
the form of various motivational theories. These motivational theories provide insights into the way
people behave and what motivates them.

Motivation theory is a way of looking at the motivation of a person and how this influences their
behavior, whether for personal or professional reasons. It's important to every aspect of society but is
especially relevant to business and management. Motivation is the key to more profitable employees, as
a motivated employee is more productive.

Motivation Theories

Motivation is a state of mind, filled with energy and enthusiasm, which drives a person to work in a
certain way to achieve desired goals. Motivation is a force that pushes people to work with a high level
of commitment and focus, even if things are going against them. Motivation translates into a certain
kind of human behavior.  In short, motivation is the driving force behind human actions.

There are many different forces that guide and direct our motivations. It is important to ensure that
every team member in an organization is motivated and meets the best project management course
bottom line. Various psychologists have studied human behavior and have formalized their findings in
the form of various motivational theories. These motivational theories provide insights into the way
people behave and what motivates them.

Motivation theory is a way of looking at the motivation of a person and how this influences their
behavior, whether for personal or professional reasons. It's important to every aspect of society but is
especially relevant to business and management. Motivation is the key to more profitable employees, as
a motivated employee is more productive.

What are the Theories of Motivation?

Motivation is a huge field of study. Psychologists have proposed many different theories of motivation.
Some of the most famous motivational theories include the following:

Maslow’s Theory of Hierarchical Needs

Abraham Maslow postulated that a person will be motivated when all his needs are fulfilled. People do
not work for security or money, but they work to contribute and to use their skills. He demonstrated this
by creating a pyramid to show how people are motivated and mentioned that ONE CANNOT ASCEND TO
THE NEXT LEVEL UNLESS LOWER-LEVEL NEEDS ARE FULFILLED. The lowest level needs in the pyramid are
basic needs and unless these lower-level needs are satisfied people do not look at working toward
satisfying the upper-level needs.

Physiologically needs: are basic needs for survival such as air, sleep, food, water, clothing, sex, and
shelter.

Safety needs: Protection from threats, deprivation, and other dangers (e.g., health, secure employment,

and property)
Social (belongingness and love) needs: The need for association, affiliation, friendship, and so on. Self-
esteem needs:  The need for respect and recognition.

Self-actualization needs:  The opportunity for personal development, learning, and

fun/creative/challenging work.  Self-actualization is the highest-level need to which a human being can
aspire. The leader will have to understand at what level the team members are currently, and seek out
to help them to satisfy those specific needs and accordingly work to help fulfill those needs. This will
help the team members perform better and move ahead with the project. A PMP certification will help
you better understand this concept. Also, as their needs get fulfilled, the team members will start
performing, till the time they start thinking of fulfilling the next upper level of need as mentioned in the
pyramid.

Hertzberg’s two-factor Theory

Hertzberg classified the needs into two broad categories; namely hygiene factors and motivating factors:
poor hygiene factors may destroy motivation but improving them under most circumstances will not
improve team motivation

4. Workers stressfulness

Stress has been defined in different ways over the years. Originally, it was conceived of as pressure from
the environment, then as strain within the person. The generally accepted definition today is one of
interaction between the situation and the individual. It is the psychological and physical state that
results when the resources of the individual are not sufficient to cope with the demands and pressures
of the situation. Thus, stress is more likely in some situations than others and in some individuals than
others. Stress can undermine the achievement of goals, both for individuals and for organisations .

What Is Job Stress? Job stress can be defined as the harmful physical and emotional responses that
occur when the requirements of the job do not match the capabilities, resources, or needs of the
worker. Job stress can lead to poor health and even injury.

Techniques such as meditation, deep breathing exercises, and mindfulness (a state in which you actively
observe present experiences and thoughts without judging them) can help melt away stress. Start by
taking a few minutes each day to focus on a simple activity like breathing, walking, or enjoying a meal.

5. Organizational culture

Organizational culture is generally understood as all of a company's beliefs, values and attitudes, and
how these influence the behaviour of its employees. Culture affects how people experience an
organization—that is, what it's like for a customer to buy from a company or a supplier to work with it.

The five key elements of organizational culture are equally valuing respect and results, living a servant
purpose, continuously focusing on trust, validation and growth, effectively and diligently measuring
human behaviors, and using your voice as a leader for the greater good.
Organizational culture is the rules, values, beliefs, and philosophy that dictates team members' behavior
in a company. The culture consists of an established framework that guides workplace behavior.
Examples include integrity, teamwork, transparency, and accountability.

6. Resistance to organizational change

Resistance to change often occurs when existing company culture and norms are deeply rooted in an
organization, which hinders the acceptance of new ways of doing things, such as new processes,
leadership, team structure, or technology .

Here are the biggest reasons why employees resist change:

You're not communicating clearly.

Fear of the unknown.

There is no transitional support.

Employees are grieving their loss.

Employees feel challenged.

People get replaced as the experts.

Resistance is the path of least resistance.

7 Tactics to overcome resistance to change

Structure the team to maximize its potential.

Set challenging, achievable and engaging targets.

Resolve conflicts quickly and effectively.

Show passion.

Be persuasive.

Empower innovation and creativity.

Remain positive and supportive.

7. Conflicts in an organization

In particular, three types of conflict are common in organizations: task conflict, relationship conflict, and
value conflict.

The Top 5 Conflict Resolution Strategies

Don't Ignore Conflict.

Clarify What the Issue Is.

Bring Involved Parties Together to Talk.

Identify a Solution.

Continue to Monitor and Follow Up on the Conflict.

8. Factors promote or inhibit the development of team work

What inhibits teamwork?

Barriers to effective teams include the challenges of knowing where to begin, dominating team
members, the poor performance of team members, and poorly managed team conflict.

Factors That Promote Effective Teamwork.

Your employees are stronger when they work together than when they operate at cross-purposes.
Effective teamwork harnesses collective energy and intelligence to create a whole that is more
successful than the sum of its parts. This generates a positive feedback loop, where high morale from
work well done leads to high-quality work in the future.

Willingness to Share and Listen

Successful communication that leads to effective teamwork begins with a companywide willingness to
share and listen. When employees feel that their opinions are valued, they're likely to contribute to
team efforts where their unique perspectives make a difference. Listening and respect should be valued
at all levels in your organization, starting with top management and reaching into the way each
department is run.

Practical communication tools then build on this cultural foundation. Digital platforms such as Slack and
Asana are useful for organizing and sharing information about ongoing projects. Holding regular
meetings creates an ongoing in-person space to check in and strategize. Regular email updates are
invaluable for making sure that everyone on your team knows what they need to know when they need
to know it.

Everyone On the Same Page

When everyone on a team knows what they're trying to achieve, it's much easier to get on the same
page to achieve it. Communicating objectives starts with making sure that everyone involved fully
understands the company's overall mission, whether it's reducing suffering, improving the environment,
or making as much money as possible.

Building on this foundation, your team members should then be briefed on short-term goals such as
achieving certain sales figures or getting a product to market in a specific amount of time. These goals
should next be broken down into milestones, or steps to be achieved along the way as the team effort
proceeds toward its practical objectives.

Creating and communicating these strategic objectives helps your team members align their work,
assess progress, and collaborate to change course as needed.

Goodwill and Fair Pay

Your team will work together more effectively if its members like each other and feel that they're valued
and treated fairly. You can't create goodwill with monetary investment or top-down company policies.
However, you can set the stage for it by recognizing individual and group achievements and by
respecting your employees' personal needs in and out of the workplace. Allowing workers to take time
to address family issues may seem on the surface to interfere with effective teamwork because it takes
team members away from their work.

However, it allows them to focus more fully when they return, and it communicates to all team
members that the company sees them as complete human beings. Equitable pay also contributes to
successful teamwork. You don't have to pay all employees equally, but you should tie pay levels to
experience and achievements, and workers shouldn't feel like they're paid less than co-workers who
don't perform as well.