OBJECTIVES This chapter will:
■ discuss how we can identify and describe different organizational structures;
■ discuss how organizations can be described in terms of different models:
1 the stakeholder groups 2 the organization’s subsystems 3 the organization hierarchy;
■ identify and discuss how communication is represented in these different models and look at issues which affect these formal structures, including the status and role of informal networks;
■ review recent organizational theory and identify likely organizational changes and developments for the next decade;
■ discuss how these changes will affect both organizational structure and communication.
HOW CAN WE DEFINE ORGANIZATIONAL STRUCTURE?
You will find many different ways of representing the structure of an organization in different textbooks. One of the most common is the organization chart, and a simple example is given in Figure 6.1. But what does this tell us? The vertical dimension shows the hierarchy and status relations; and the horizontal dimension shows the range of activi- ties which the company is involved in. In this example of a manufacturing company, these activities include production, research and development, finance, marketing, and so on.
It is important to remember that this diagram is oneway of representing an organization.
As James Taylor (1995, p. 43) puts it, ‘an orgchart is a theoretical construction, or concep- tual model, meant to represent the structure of the organization in a way that captures the intuitive sense of what an organization is for the people who make it up’. Taylor goes on to argue that this is often ‘taken for granted’ and that the image of the organization as a well-ordered system with ‘well-structured authority relations’ (p. 45) can be very misleading. If management see the organization in this ‘clear-cut’ way, then they may imple- ment policies which do not work because the organization does notactually work in such a systematic way. His main example is office automation systems which fail to recognize how the humans in the system actually need to work.
A similar point is made by Hosking and Morley when they argue that ‘the entitative approach has dominated studies of organizations’ (1991, p. 41). Organizations are seen as
‘well-defined entities’ with clear boundaries, identities, ‘purposes which are relatively well defined’ (p. 41) and formal structures. They argue that ‘social organization is better under- stood in terms of relational processes’ (p. 61). In other words, organizing is a process of ongoing negotiation between people and groups with communication as the ‘oil’ which lubricates this process.
Different ways of representing the structure of the organization are not just matters of technical detail. They can represent fundamentally different approaches and different theo- retical assumptions. If you review some of the classic texts on organizations, you will find very different starting points. These range from the organization’s contribution to the wider 1111
2 3 4 5 6 7 8 9 10 1 2 3 411 5 6 7 8 9 20111 1 2 3 4 5 6 7 8 9 30 1 2 3 4 5 6 7 8 9 40 1 2 3
4111 Figure 6.1 Simple organization chart of a manufacturing company
Sales department manager
Sales representatives
Human resources manager
Personnel department
Public relations unit Chief executive
Finance department manager
Accounting staff
Production manager
Production staff Divisional head
Product supervisors
Production staff Divisional head
Product development engineers Engineering and development manager Product
supervisors
society, through approaches based upon how power and authority is organized, and on to approaches which reflect how the organization is structured to meet the demands of its environment. One very influential management text has argued that ‘all theories of orga- nization and management are based on implicit images or metaphors that lead us to see, understand, and manage organizations in distinctive yet partial ways’ (Morgan, 1997, p. 4).
As our main purpose is to focus on communication, we will not provide detailed analysis of different theories and metaphors (for an alternative analysis, see Daniels and Spiker, 1994). What we will do is show how different structural perspectives have important impli- cations for the role of communication, by offering three different ways of describing the organization’s structure:
■ as a set of stakeholder groups who are connected through communication;
■ as a set of managed subsystems;
■ as based on a command hierarchy which can be realized in different ways.
Defining the stakeholders
The leading British writer on organizations, Rosemary Stewart, defines stakeholders as
‘people who have an interest in the organisation, which may cause them to seek to influ- ence managers’ actions’ (1991, p. 80). She also comments that ‘Managers have to take account of more – and more powerful – stakeholder groups than in the past.’ Other commentators, such as the American writer Stanley Deetz, have argued that this model of business communication is much more relevant to modern organizations because they need to consider much more than simple economic motives. They must consider broader issues and implications, and so communication with both suppliers and the local community must forge long-term relationships for the common good (Deetz, 1995). This analysis has also generated new forms of communication, as described in Box 6.1.
EXERCISE
Consider how you would try to describe the structure of an organization you know well.
What would your description contain? What would it focus on? Would you end up drawing some form of organization chart? Or would you concentrate on the individuals or groups in the organization and the relations between them?
EXERCISE
Take an organization which you know, either as a member or as a customer or user. How would you describe the different stakeholder groups which are involved with that organi- zation? Would it be feasible to bring them together in the way described in Box 6.1? Does your analysis suggest any problems in communication?
Defining the organization’s subsystems
The executive group in charge of an organization is responsible for maintaining a number of communication systems. These systems are interdependent, but they are described inde- pendently in Table 6.1, where we try to show the relationship of the executive group to these various communication systems.
Defining the hierarchy
We have already suggested that there are different forms of hierarchy in modern organiza- tions. One fairly typical set of definitions comes from Andrews and Herschel (1996). They suggest six prominent forms of organization:
1 the traditional centralized structure;
2 the centralized structure with decentralized management;
3 the divisional form;
1111 2 3 4 5 6 7 8 9 10 1 2 3 411 5 6 7 8 9 20111 1 2 3 4 5 6 7 8 9 30 1 2 3 4 5 6 7 8 9 40 1 2 3 4111
BOX 6.1 COMMUNICATING WITH STAKEHOLDERS
Future search conferences are a method which some senior executives have used to try to improve connections and relationships between the different stakeholder groups, especially in periods of change or economic turmoil. These conferences are based on three essential features:
■ They bring together the ‘whole system’ in one place to work through an agenda which focuses on the organization’s task.
■ They emphasize connections between the stakeholders.
■ They encourage the stakeholders to ‘take ownership’ of the future development of the company and to commit themselves to future action.
With up to eighty participants, lasting up to three days, and involving external facilitators to manage the process, these are expensive and significant events for a company. They need to be carefully planned beforehand in order to create an agenda which all the participants will commit to.
EXERCISE
Take an organization which you know, either as a member or as a customer or user. How do the subsystems described above seem to work in that organization? Are all the communication channels used effectively? Does your analysis suggest any problems in communication?
Table 6.1Organization subsystems and their communication SystemMain purposes include:Typical means of communication The shareholder system■To communicate shareholders’■Articles of association directives, policies and decisions■Board meetings ■To communicate the executives’■Board resolutions requests, reports and goals to ■Annual general meetings the shareholders■Annual reports ■Minutes of meetings The regulatory system■To comply with the state, provincial ■Laws, government gazettes and local laws and regulationsand regulatory documents ■To provide information required by■Prescribed forms regulatory agencies■Prescribed reports The community system■To convey the organization’s ■Mass media including TV, objectivesradio and the press ■To improve the organization’s ■Press releases image and co-operation with the ■Commercial and technical communityjournals ■Special publicity material and events The supplier system■To ensure that the organization ■Advertising in a variety of obtains regular supplies of goods media and services at competitive prices■Directories
Table 6.1(cont) SystemMain purposes include:Typical means of communication ■To recruit, hold and develop the ■Specialist recruiting necessary human resources for organizations the organization■Forms ■Catalogues The customer system ■To promote sales of the ■Advertising organization’s goods and services■Mass media ■To receive and analyse information■Sales and information from the marketliterature ■To provide customer support ■Articles in the commercial on requestand industrial publications ■Live presentations ■Audio-visual presentations ■User manuals The administrative system■To maintain a sound administration■Policy statements and ■To ensure that the organizationdirectives achieves its mission■Job descriptions ■To co-operate with the employee■Training courses and manuals representative system to ensure■Operating manuals employee harmony■House journals ■Electronic communication media ■Group communication system
Table 6.1(cont) SystemMain purposes include:Typical means of communicationTypical formal responsibilities Employee representative ■To set out and negotiate changes■Policy and procedure From the organization’s side, the chief systemsto wages and conditions of documentsexecutive has a major responsibility, employment■Employment contracts andsome of which is delegated to personnel ■To settle disputesconditionsor human resource departments. From ■To negotiate with trade unions■Contracts and agreementsthe side of employees, the responsibility ■Negotiating and discussionmay lie with trade union officials, groupselected representatives or appointed ■Arbitrators, ombudsmen, etc.spokespersons. ■Notices Notes: This definition of subsystems reflects the fact that an organization is deeply involved with its local community. The community provides suppliers of goods and services, employees and customers. As we noted above in the discussion of stakeholders, organizations are increas ingly becoming involved with a community in a socio-political sense and have seen social responsibility as a necessary function of the organization. These subsystems all exist to some extent but they can obviously be very different. For example, employee representative systems can range from virtually no system under an autocratic management to highly complex systems with written constitutions and an organ tional infrastructure.
4 the decentralized structure;
5 the matrix structure;
6 what they call the ‘type D’ organization.
In the first two of these forms, we have strong control from the senior management group, who will usually be based in the same physical location. The traditional centralized organi- zation emphasizes control and co-ordination through a very clear hierarchy. As you go down the hierarchy, you find people working on increasingly specialized tasks. There are stan- dard ways of working, and these standard procedures may cause problems if staff are presented with new problems to deal with. In another type of centralized structure, the management is decentralized to some extent. In other words, the top management will control the main functions such as production or sales but the managers at lower levels will have some discretion when they make specific operational decisions.
In forms 3 and 4, we have structures where the senior management have devolved authority in rather different ways. Within a divisional structure, the organization has a central office which co-ordinates and controls but the main work of the organization is carried out in its divisions. These divisions may be based on different functions or prod- ucts, or on different geographical regions. The divisions will have authority to make decisions within certain limits. It is even possible for there to be divisions within one orga- nization which are in direct competition with one another.
In a decentralized organization, the sub-units are all owned by a holding company which may make little effort to co-ordinate provided that the economic performance of the different units meets targets.
In the matrix structure, we have a dual command structure so that employees report to senior staff in terms of their specialist role. This is very different from the traditional hier- archy where each employee tends to have a single line manager, and we discuss this in more detail later.
The final form – type D – is characterized by ‘distributed work arrangements’ where the work is distributed between the organization ‘core’ and peripheral units which might involve external subcontracting and various other mechanisms based on the use of infor- mation technology.
DEFINING STRUCTURES WITHIN STRUCTURES
Although broad characterizations of a hierarchy are useful, we can argue that few organi- zations (especially larger ones) conform entirely to a single basic structure. Thus we need to consider in more detail how some basic structures work: line, staff/functional, matrix and committee.
1111 2 3 4 5 6 7 8 9 10 1 2 3 411 5 6 7 8 9 20111 1 2 3 4 5 6 7 8 9 30 1 2 3 4 5 6 7 8 9 40 1 2 3 4111
EXERCISE
For each of these four types of structure, find an example in an organization you know and assess how well communication operates within that structure.
Line structure
A line structure is based on the idea that at each level, people control and administer the work of a group in the level below them. Instructions and information pass from the top downwards, and information and requests are passed from the bottom upwards. Sideways communication takes place via a cross-over point.
Such a structure has potential advantages:
■ It clearly sets out the lines of administrative responsibility (you know what you have to do and who you report to).
■ All levels of the organization should be informed about matters which are relevant to their area.
But it also has potential disadvantages:
■ It leads to excessively long lines of communication (for example, when messages have to go across the organization).
■ People at higher levels can easily be overloaded with information.
■ It can lead to ‘compartmentalization’ of information.
Various techniques have been be used to overcome some of the problems of line commu- nication, including:
■ Contracting lines of communication.A senior manager can address several levels at once, whether through meetings or by some form of general notice.
■ Reducing the number of administrative levels.If communication is passed through fewer people, misunderstanding is less likely.
One characteristic of many large organizations over the past twenty years has been regular restructuring which has reduced the layers of middle management (sometimes called de- layering or downsizing). This has often been done as part of a ‘re-engineering’ exercise, using ideas described in Box 6.2.
Staff or functional structure
In terms of staff or functional structure, management includes both specialist and functional managers, each one instructing workers on an aspect of their work. A version of this model was advocated by one of the early management theorists, Frederick Taylor, who is usually associated with breaking down manual tasks into small functional tasks. He actually suggested that management should also operate in this way, but the managements of his day did not wish to lose their power base and simply applied his logic to the workers.
It would be virtually impossible for a business to operate as a purely functional organi- zation, as there would be no one to co-ordinate the work, or take ultimate responsibility.
(Taylor did advocate a central planning department to pull everything together.) However,
most organizations do make use of specialist functions, as there are potential advantages of functional structure:
■ Workers are instructed by specialists with expert knowledge.
■ Lines of communication are short.
But there are corresponding disadvantages:
■ Workers have many supervisors and may receive conflicting instructions.
■ Workers may have difficulty in assigning priorities.
■ Workers may play one supervisor against another.
1111 2 3 4 5 6 7 8 9 10 1 2 3 411 5 6 7 8 9 20111 1 2 3 4 5 6 7 8 9 30 1 2 3 4 5 6 7 8 9 40 1 2 3 4111
BOX 6.2 THE RE-ENGINEERING PROCESS
Business process re-engineering (BPR) was defined by its founders as ‘the fundamental rethinking and radical design of business processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service, and speed’
(Hammer and Champy, 1993, p. 32). They suggested that radical rethinking of what the organization is about will lead to changes such as:
■ changes in organizational structure such as a move to team-working;
■ changes in job and role definitions with increased sharing of responsibility;
■ changes to managers’ roles – they become more like advisers or facilitators;
■ drastic reduction in the number of levels of management – the hierarchy becomes flatter.
In other words, ‘re-engineering means that organisations start over, re-evaluating ways in which they create products or services that deliver value to their customers’ (Andrews and Herschel, 1996, p. 351).
But does it work? In the mid-1990s, re-engineering came in for very serious criticism (Micklethwait and Wooldridge, 1996, ch. 1). It was suggested that:
■ Many if not most re-engineering projects fail to deliver – that BPR has an 85 per cent failure rate (Birchall and Lyons, 1995, p. 237).
■ Re-engineering fails to take account of the softer human factors which influence business performance.
■ Simple reliance on cost-cutting and IT does not deliver the promised improvements and the organization should be ‘investing in people first’.
Even articles which suggested that BPR had a more impressive record of success also suggested that it would not work without a strong emphasis on the skills of cultural change, including clear communications and the development of trust.
Some of these disadvantages can be overcome by a clear definition of responsibilities. But for most purposes, a purely functional organization is not practical.
Committee structure
The term ‘committee’ is used (and misused) for a variety of organizational structures.
Strictly speaking, a committee is a group of people who are elected by the members of an organization to control its affairs. The committee members then elect certain office bearers, normally a chair, secretary and treasurer. The committee may also appoint an executive to carry out policy decisions and to attend to the day-to-day operation of the organization.
The chair, whose authority is conferred by the committee, is responsible for its smooth functioning. However, committee members may, under certain conditions, remove the chair from office.
Committees often appoint subcommittees to assist them with specific tasks. These subcommittees may be either standing or ad hoc (constituted for this purpose) committees.
Standing committees are usually responsible for ongoing activities such as finance, publicity, etc., while ad hoc committees are constituted for a special task and are dissolved once the task is completed.
Clubs and professional organizations are often run by committees which operate on democratic principles. Decision-making is usually by majority vote, though they often try to achieve consensus. Some committees, particularly in business, are not truly democratic but have variations on the democratic principle. Traditional universities, for example, often operate on a system of interlocking committees, and membership of these committees is often determined by status or invitation. Increasing managerialism in higher education has weakened these structures.
There are few ‘true’ committees in business and industry in the sense we have defined above, but most business organizations appoint committees for co-ordination and special purposes. For example, the representative system usually operates with committee-type structures.
Potential advantages of this structure include the following:
■ It permits a rapid exchange of information and ideas.
■ It encourages co-operation.
■ It generates new ideas and information.
There are also potential disadvantages:
■ Decisions depend on the frequency of meetings.
■ Effectiveness is highly dependent on the secretariat and chair.
We shall revisit these problems in Part three when we look at groups, teams and meetings.