{"id":880,"date":"2019-04-24T23:03:34","date_gmt":"2019-04-24T23:03:34","guid":{"rendered":"https:\/\/courses.lumenlearning.com\/wm-organizationalbehavior\/?post_type=chapter&#038;p=880"},"modified":"2024-04-24T22:40:23","modified_gmt":"2024-04-24T22:40:23","slug":"history-of-common-structures","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/wm-organizationalbehavior\/chapter\/history-of-common-structures\/","title":{"raw":"History of Common Structures","rendered":"History of Common Structures"},"content":{"raw":"<div class=\"textbox learning-objectives\">\r\n<h3>Learning Outcomes<\/h3>\r\n<ul>\r\n \t<li>Discuss common organizational structures and their historical origins<\/li>\r\n<\/ul>\r\n<\/div>\r\nFayol introduced chain of command, separation of jobs, power, and authority; Weber introduced the bureaucratic approach, and Taylor introduced job specialization. They championed the idea of structure within an organization to support efficiency and effective operations, but they never actually prescribed what an organizational structure should look like. In fact, organizational structure was a matter of choice and could differ from organization to organization. The only criterion for any proposed structure was that it be effective.\r\n\r\nIt wasn\u2019t until the 1930s that organizational structures started becoming a bit more standard. As human relations theory took hold, researchers pondered an organizational structure that would allow for the needs, knowledge and opinions of employees to be better recognized.\r\n\r\nAn organization\u2019s structure contains the six elements we described, and is laid out in such a way that employees are able to, be productive, make a profit, and accomplish the organization\u2019s mission. Let\u2019s take a look at some of the older, simpler organizational structures that companies have adopted. They\u2019re still very much in use today.\r\n<h2>The Simple Structure<\/h2>\r\nThe simple structure is aptly named because, well, there\u2019s just not much to it. Simple structures have\r\n<ul>\r\n \t<li>A low degree of departmentalization<\/li>\r\n \t<li>Wide spans of control<\/li>\r\n \t<li>Centralized authority<\/li>\r\n \t<li>Little formalization<\/li>\r\n<\/ul>\r\nThe typical simple organization structure is flat:\r\n\r\n<img class=\"aligncenter wp-image-893 size-full\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/4052\/2019\/04\/24212925\/TheSimpleStructure.jpg\" alt=\"A simple organizational structure with a manager and four individuals who directly report to them.\" width=\"1400\" height=\"403\" \/>\r\n\r\nThis type of organizational structure is inexpensive to maintain and accountability is very clear. However, it\u2019s difficult to maintain this kind of structure in any but a small organization. When this kind of organization structure increases in size, decision making slows down and the manager becomes overly burdened as the go-to decision maker for 50-100 people. It\u2019s also risky \u2013 everything depends on one person, and should that person become ill or die, it puts the business in jeopardy.\r\n\r\nThe simple structure is often referred to as \u201cpre-bureaucratic,\u201d in that it lacks a standardization of tasks.\r\n<h2>Bureaucratic Structure<\/h2>\r\nBureaucratic organizational structures take a chapter out of researcher Max Weber\u2019s book, with clearly defined roles and responsibilities, hierarchical structure and respect for merit. This organizational structure is characterized by\r\n<ul>\r\n \t<li>Highly routine operating tasks achieved through specialization<\/li>\r\n \t<li>Very formalized rules and regulations<\/li>\r\n \t<li>Functional departmentalization<\/li>\r\n \t<li>Centralized authority<\/li>\r\n \t<li>Narrow spans of control<\/li>\r\n \t<li>Decision making that follows the chain of command<\/li>\r\n<\/ul>\r\nBureaucratic organizational structures are pyramid-like, with a CEO atop the chain of command in the corporate structure and a clear chain of command underneath. A bureaucratic organizational structure might look like this:\r\n\r\n<img class=\"aligncenter wp-image-1362\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/4052\/2019\/04\/14212017\/BureaucraticStructure_update-1024x964.jpg\" alt=\"A bureaucratic organizational structure. At the top is a board of directors, to whom the CEO reports. The CPO and the Executive Vice President report to the CEO. The CPO has direct reports in health, beauty, and food. Each of these three departments are segmented into research and development, manufacturing, finance, marketing, and customer service. The Executive Vice President has a direct report in Admin &amp; Finance. This department is segmented into Human Resources, procurement, finance, communications, training\/safety, and legal.\" width=\"700\" height=\"659\" \/>\r\n\r\nBureaucratic organizational structures are ideal for organizations that require standardization (think banks, government offices). They\u2019re ideal for organizations looking for the ability to perform standard tasks highly efficiently. Organizations with bureaucratic structures can get by with less talented people at lower levels, because decision making almost always falls to senior leaders.\r\n\r\nThe downfalls of bureaucratic structures are that they create silos \u2013 functional areas that often don\u2019t talk to each other.\r\n\r\nIf the bureaucratic organizational structure looks familiar, it\u2019s because it\u2019s still tremendously popular with organizations today. Even as trends are changing toward teams and other types of structures that help businesses compete, organizations still hold onto the hierarchical structure of the bureaucratic structure as the norm.\r\n<h2>The Matrix Structure<\/h2>\r\n[caption id=\"attachment_729\" align=\"aligncenter\" width=\"834\"]<img class=\"wp-image-729 size-full\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/1972\/2017\/06\/26195333\/Organization-Structure.png\" sizes=\"(max-width: 834px) 100vw, 834px\" srcset=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/1972\/2017\/06\/26195333\/Organization-Structure.png 834w, https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/1972\/2017\/06\/26195333\/Organization-Structure-300x214.png 300w, https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/1972\/2017\/06\/26195333\/Organization-Structure-768x549.png 768w, https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/1972\/2017\/06\/26195333\/Organization-Structure-65x46.png 65w, https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/1972\/2017\/06\/26195333\/Organization-Structure-225x161.png 225w, https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/1972\/2017\/06\/26195333\/Organization-Structure-350x250.png 350w\" alt=\"An organizational structure with the CEO at top, four CEOs of SBUs below, and five geographic locations also under the CEO along the side\" width=\"834\" height=\"596\" \/> Matrix structure with geographic and product (SBU) structure.[\/caption]\r\n\r\nA matrix structure creates dual lines of authority and combines functional and product departmentalization.\r\n\r\nAd agencies, hospitals, universities and management consulting firms use the matrix organizational structure. It\u2019s easy to see why \u2013 by creating a dual reporting situation, a manager who\u2019s working with a company on advertising would be able to manage a team that included a representative from each of the needed areas to get a campaign running\u2014a graphic designer, a space planner and so on.\r\n\r\nThis structure allows for the efficient allocation of specialists. Information is more easily exchanged, as the contact between the different departments is increased.\r\n\r\nThe major disadvantage is the ability to get all these people moving at the same time, with clear priorities, to deliver a solution that\u2019s on time and on budget. It can also create power struggles, because it tosses aside the idea of unity of command.\r\n\r\nThe matrix structure is among those that are considered \u201cpost-bureaucratic,\u201d in that it does contrast in some ways with Weber\u2019s ideals. That said, the matrix structure doesn\u2019t really depart from Weber\u2019s in that hierarchy and authority still exist here.\r\n<div class=\"textbox tryit\">\r\n<h3>Practice Question<\/h3>\r\nhttps:\/\/assess.lumenlearning.com\/practice\/4a632c30-ee61-4bf9-93e1-a79122ee1cad\r\n\r\n<\/div>\r\nOrganizational structures continue to evolve to meet the globalization and economic demands of today\u2019s business world. Let\u2019s take a look at some more modern types of structures.","rendered":"<div class=\"textbox learning-objectives\">\n<h3>Learning Outcomes<\/h3>\n<ul>\n<li>Discuss common organizational structures and their historical origins<\/li>\n<\/ul>\n<\/div>\n<p>Fayol introduced chain of command, separation of jobs, power, and authority; Weber introduced the bureaucratic approach, and Taylor introduced job specialization. They championed the idea of structure within an organization to support efficiency and effective operations, but they never actually prescribed what an organizational structure should look like. In fact, organizational structure was a matter of choice and could differ from organization to organization. The only criterion for any proposed structure was that it be effective.<\/p>\n<p>It wasn\u2019t until the 1930s that organizational structures started becoming a bit more standard. As human relations theory took hold, researchers pondered an organizational structure that would allow for the needs, knowledge and opinions of employees to be better recognized.<\/p>\n<p>An organization\u2019s structure contains the six elements we described, and is laid out in such a way that employees are able to, be productive, make a profit, and accomplish the organization\u2019s mission. Let\u2019s take a look at some of the older, simpler organizational structures that companies have adopted. They\u2019re still very much in use today.<\/p>\n<h2>The Simple Structure<\/h2>\n<p>The simple structure is aptly named because, well, there\u2019s just not much to it. Simple structures have<\/p>\n<ul>\n<li>A low degree of departmentalization<\/li>\n<li>Wide spans of control<\/li>\n<li>Centralized authority<\/li>\n<li>Little formalization<\/li>\n<\/ul>\n<p>The typical simple organization structure is flat:<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-893 size-full\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/4052\/2019\/04\/24212925\/TheSimpleStructure.jpg\" alt=\"A simple organizational structure with a manager and four individuals who directly report to them.\" width=\"1400\" height=\"403\" \/><\/p>\n<p>This type of organizational structure is inexpensive to maintain and accountability is very clear. However, it\u2019s difficult to maintain this kind of structure in any but a small organization. When this kind of organization structure increases in size, decision making slows down and the manager becomes overly burdened as the go-to decision maker for 50-100 people. It\u2019s also risky \u2013 everything depends on one person, and should that person become ill or die, it puts the business in jeopardy.<\/p>\n<p>The simple structure is often referred to as \u201cpre-bureaucratic,\u201d in that it lacks a standardization of tasks.<\/p>\n<h2>Bureaucratic Structure<\/h2>\n<p>Bureaucratic organizational structures take a chapter out of researcher Max Weber\u2019s book, with clearly defined roles and responsibilities, hierarchical structure and respect for merit. This organizational structure is characterized by<\/p>\n<ul>\n<li>Highly routine operating tasks achieved through specialization<\/li>\n<li>Very formalized rules and regulations<\/li>\n<li>Functional departmentalization<\/li>\n<li>Centralized authority<\/li>\n<li>Narrow spans of control<\/li>\n<li>Decision making that follows the chain of command<\/li>\n<\/ul>\n<p>Bureaucratic organizational structures are pyramid-like, with a CEO atop the chain of command in the corporate structure and a clear chain of command underneath. A bureaucratic organizational structure might look like this:<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-1362\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/4052\/2019\/04\/14212017\/BureaucraticStructure_update-1024x964.jpg\" alt=\"A bureaucratic organizational structure. At the top is a board of directors, to whom the CEO reports. The CPO and the Executive Vice President report to the CEO. The CPO has direct reports in health, beauty, and food. Each of these three departments are segmented into research and development, manufacturing, finance, marketing, and customer service. The Executive Vice President has a direct report in Admin &amp; Finance. This department is segmented into Human Resources, procurement, finance, communications, training\/safety, and legal.\" width=\"700\" height=\"659\" \/><\/p>\n<p>Bureaucratic organizational structures are ideal for organizations that require standardization (think banks, government offices). They\u2019re ideal for organizations looking for the ability to perform standard tasks highly efficiently. Organizations with bureaucratic structures can get by with less talented people at lower levels, because decision making almost always falls to senior leaders.<\/p>\n<p>The downfalls of bureaucratic structures are that they create silos \u2013 functional areas that often don\u2019t talk to each other.<\/p>\n<p>If the bureaucratic organizational structure looks familiar, it\u2019s because it\u2019s still tremendously popular with organizations today. Even as trends are changing toward teams and other types of structures that help businesses compete, organizations still hold onto the hierarchical structure of the bureaucratic structure as the norm.<\/p>\n<h2>The Matrix Structure<\/h2>\n<div id=\"attachment_729\" style=\"width: 844px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-729\" class=\"wp-image-729 size-full\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/1972\/2017\/06\/26195333\/Organization-Structure.png\" sizes=\"auto, (max-width: 834px) 100vw, 834px\" srcset=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/1972\/2017\/06\/26195333\/Organization-Structure.png 834w, https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/1972\/2017\/06\/26195333\/Organization-Structure-300x214.png 300w, https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/1972\/2017\/06\/26195333\/Organization-Structure-768x549.png 768w, https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/1972\/2017\/06\/26195333\/Organization-Structure-65x46.png 65w, https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/1972\/2017\/06\/26195333\/Organization-Structure-225x161.png 225w, https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/1972\/2017\/06\/26195333\/Organization-Structure-350x250.png 350w\" alt=\"An organizational structure with the CEO at top, four CEOs of SBUs below, and five geographic locations also under the CEO along the side\" width=\"834\" height=\"596\" \/><\/p>\n<p id=\"caption-attachment-729\" class=\"wp-caption-text\">Matrix structure with geographic and product (SBU) structure.<\/p>\n<\/div>\n<p>A matrix structure creates dual lines of authority and combines functional and product departmentalization.<\/p>\n<p>Ad agencies, hospitals, universities and management consulting firms use the matrix organizational structure. It\u2019s easy to see why \u2013 by creating a dual reporting situation, a manager who\u2019s working with a company on advertising would be able to manage a team that included a representative from each of the needed areas to get a campaign running\u2014a graphic designer, a space planner and so on.<\/p>\n<p>This structure allows for the efficient allocation of specialists. Information is more easily exchanged, as the contact between the different departments is increased.<\/p>\n<p>The major disadvantage is the ability to get all these people moving at the same time, with clear priorities, to deliver a solution that\u2019s on time and on budget. It can also create power struggles, because it tosses aside the idea of unity of command.<\/p>\n<p>The matrix structure is among those that are considered \u201cpost-bureaucratic,\u201d in that it does contrast in some ways with Weber\u2019s ideals. That said, the matrix structure doesn\u2019t really depart from Weber\u2019s in that hierarchy and authority still exist here.<\/p>\n<div class=\"textbox tryit\">\n<h3>Practice Question<\/h3>\n<p>\t<iframe id=\"assessment_practice_4a632c30-ee61-4bf9-93e1-a79122ee1cad\" class=\"resizable\" src=\"https:\/\/assess.lumenlearning.com\/practice\/4a632c30-ee61-4bf9-93e1-a79122ee1cad?iframe_resize_id=assessment_practice_id_4a632c30-ee61-4bf9-93e1-a79122ee1cad\" frameborder=\"0\" style=\"border:none;width:100%;height:100%;min-height:300px;\"><br \/>\n\t<\/iframe><\/p>\n<\/div>\n<p>Organizational structures continue to evolve to meet the globalization and economic demands of today\u2019s business world. Let\u2019s take a look at some more modern types of structures.<\/p>\n\n\t\t\t <section class=\"citations-section\" role=\"contentinfo\">\n\t\t\t <h3>Candela Citations<\/h3>\n\t\t\t\t\t <div>\n\t\t\t\t\t\t <div id=\"citation-list-880\">\n\t\t\t\t\t\t\t <div class=\"licensing\"><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Original<\/div><ul class=\"citation-list\"><li>History of Common Structures. <strong>Authored by<\/strong>: Freedom Learning Group. <strong>Provided by<\/strong>: Lumen Learning. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><li>Image: The Simple Structure. <strong>Provided by<\/strong>: Lumen Learning. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><li>Image: Bureaucratic Structure. <strong>Provided by<\/strong>: Lumen Learning. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><\/ul><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Shared previously<\/div><ul class=\"citation-list\"><li>Image: Matrix Structure with Geographic and Product (SBU) Structure. <strong>Authored by<\/strong>: David J. Thompson, PhD, and Lumen Learning. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/courses.lumenlearning.com\/wmopen-principlesofmanagement\/chapter\/common-organizational-structures\/\">https:\/\/courses.lumenlearning.com\/wmopen-principlesofmanagement\/chapter\/common-organizational-structures\/<\/a>. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><\/ul><\/div>\n\t\t\t\t\t\t <\/div>\n\t\t\t\t\t <\/div>\n\t\t\t <\/section>","protected":false},"author":17,"menu_order":4,"template":"","meta":{"_candela_citation":"[{\"type\":\"original\",\"description\":\"History of Common Structures\",\"author\":\"Freedom Learning Group\",\"organization\":\"Lumen Learning\",\"url\":\"\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"},{\"type\":\"cc\",\"description\":\"Image: Matrix Structure with Geographic and Product (SBU) Structure\",\"author\":\"David J. Thompson, PhD, and Lumen Learning\",\"organization\":\"\",\"url\":\"https:\/\/courses.lumenlearning.com\/wmopen-principlesofmanagement\/chapter\/common-organizational-structures\/\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"},{\"type\":\"original\",\"description\":\"Image: The Simple Structure\",\"author\":\"\",\"organization\":\"Lumen Learning\",\"url\":\"\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"},{\"type\":\"original\",\"description\":\"Image: Bureaucratic Structure\",\"author\":\"\",\"organization\":\"Lumen Learning\",\"url\":\"\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"}]","CANDELA_OUTCOMES_GUID":"0bdb6bda-dd42-4d34-92c5-34c862ffd73d, 11d3b38f-2290-4410-a496-83ef10011db0","pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"class_list":["post-880","chapter","type-chapter","status-publish","hentry"],"part":35,"_links":{"self":[{"href":"https:\/\/courses.lumenlearning.com\/wm-organizationalbehavior\/wp-json\/pressbooks\/v2\/chapters\/880","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/courses.lumenlearning.com\/wm-organizationalbehavior\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/courses.lumenlearning.com\/wm-organizationalbehavior\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/wm-organizationalbehavior\/wp-json\/wp\/v2\/users\/17"}],"version-history":[{"count":6,"href":"https:\/\/courses.lumenlearning.com\/wm-organizationalbehavior\/wp-json\/pressbooks\/v2\/chapters\/880\/revisions"}],"predecessor-version":[{"id":2128,"href":"https:\/\/courses.lumenlearning.com\/wm-organizationalbehavior\/wp-json\/pressbooks\/v2\/chapters\/880\/revisions\/2128"}],"part":[{"href":"https:\/\/courses.lumenlearning.com\/wm-organizationalbehavior\/wp-json\/pressbooks\/v2\/parts\/35"}],"metadata":[{"href":"https:\/\/courses.lumenlearning.com\/wm-organizationalbehavior\/wp-json\/pressbooks\/v2\/chapters\/880\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/courses.lumenlearning.com\/wm-organizationalbehavior\/wp-json\/wp\/v2\/media?parent=880"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/wm-organizationalbehavior\/wp-json\/pressbooks\/v2\/chapter-type?post=880"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/wm-organizationalbehavior\/wp-json\/wp\/v2\/contributor?post=880"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/wm-organizationalbehavior\/wp-json\/wp\/v2\/license?post=880"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}