Module No: 4HR018

Organisation Structures
for Effective Management

Module Leader: Kevin Willmore

Lecture 8
Module Learning Outcomes
• LO 1: Discuss the historical and theoretical basis of
organisation structure
• LO2: Analyse the relationship between organisational
structure and business strategy
• LO3: Examine the key factors to be considered in the design
of the structure of organisations
• LO4: Evaluate the implications of organisational structure for
the management and development of people and resources
Lecture Learning Outcomes
LO4: Evaluate the implications of organisational structure for the
management and development of people and resources
Implications of organisational structure for the
management and development of people and resources

• Relationship between the organisation and individuals

• The impact of information technology

• The demand for flexibility

Relationship between the organisation and individuals

One of the main objectives of the structure of an organisation is to

reduce uncertainty and confusion that typically occurs when bringing
people together to achieve a common goal or purpose:
• The structure defines the relationships among members of the
organisation
• the relationships with the external environment
• The structure defines the authority by means of a graphical
illustration referred to as an organisation chart
Relationship between the organisation and individuals

We have already discussed, in previous lectures, key terms which are

important considerations when considering the design of an
organisational structure:

• Specialisation
• Departmentalisation
• Chain of Command
• Centralisation/Decentralisation
• Formalisation
The CIPD have suggested causes of organisational
change

• Challenges of growth, especially global markets

• Economic downturns and tougher trading conditions
• Changes in strategy
• Technological changes
• Competitive pressures, including mergers and acquisitions
• customer pressure, particularly shifting markets
• Learning new organisation behaviours and skills
• Government legislation/initiatives

https://www.cipd.co.uk/knowledge/strategy/change/management-factsheet Accessed 29/08/17

The impact of information technology

In recent times, technology has become an ever increasing presence in

the workplace and it is one of the hot topics among the business world.
More and more businesses, large and small, are trying to incorporate
the latest technology into their operations.
• The scope of technology that an organisation can adopt or employ is
vast, ranging from something seeming simple, such as buying a
personal computer with a word processor, to investing in the latest
state-of-the-art computer-aided manufacturing machinery.
• Regardless of the complexity of the system or the size of the
organisation, the incorporation of technology or information systems
will accompany change 
The impact of information technology

The contribution of information technology and its impact on the

organisation is emphasised by Nadler, who states "perhaps the largest
single influence on organisational architecture and design has been the
evolution of information technology."(Gerstein, p.5)

More specifically, information technology can be linked to changes in

factors such as job design, physical layout or location, supervisory
relationships and autonomy, cooperation inside and outside the
organisation, and formation of work teams.
The impact of information technology

Computer networks allow people to communicate quickly, share ideas, and

transfer information without regard to physical locations, or to a reasonable
extent, even without regard to the temporal dimension, therefore;
• A supervisor will be able to monitor the activities of a larger number of
subordinates without requiring them to report directly to him/her
• Nadler and Main (1988) refer to this "span of control" as a measure of how
many individuals or teams that a supervisor can effectively manage
• Main (1988) makes the point that such spans will give way to "spans of
communication" which he defines as the number of people that an executive
can reach through a good information system (Main, p.52).
• Nadler makes the prediction that such an executive could supervise
hundreds of empowered individuals and groups.(Gerstein, p.173) 
The impact of information technology

Management theorist Peter Drucker sums up the autonomy of this new

empowered employee by saying:

"employees in the new information-based company will know what they

have to do without a flock of vice-presidents feeding them information
and orders."(Main, 1998, p.50)
The impact of information technology
Where we work, when we work, and how we communicate are being
revolutionised, as a "seamless" web of electronic communications
media, e-mail, voicemail, cellular telephones, laptops with modems,
hand-held organisers, video conferencing, and interactive pagers—
makes teamwork and mobility a reality.
• In an report by Forrester Research, they predict that the U.S.
telecommuting ranks would swell from 34 million in 2009 to 63
million by 2016; fuelled by broadband adoption, better collaboration
tools, and growing management experience. 
• A report has suggested that in the US and an estimated that 50% of
people will work remotely by 2020
The impact of information technology - Virtual workplaces

A workplace that has multiple locations, but not necessarily the same
all the time, as business is done over email, mail, internet and video.
Employees within the company communicate with each other through
such technology, as well as the staff communicating with their
clients/customers.
Read more: http://www.businessdictionary.com/definition/virtual-workplace.html - Accessed 29/08/17
The impact of information technology - Virtual workplaces

Virtual workplaces are not appropriate for all jobs. Jobs in sales,
marketing, and consulting seem to be suited best, although even in
these jobs, virtual work arrangements are not recommended for new
employees or those who are new to a position. The key is;
• To work with employees well ahead of planned transitions
• Firms such as Lotus, IBM, and Hewlett-Packard have written
guidelines, training, and networks of peers to facilitate the transition
• For example, Hewlett-Packard’s guidelines for virtual workplaces
address topics such as who can participate, family and household
issues, remote office setup, and administrative processes
The impact of information technology - Telecommuting

Another form of virtual work arrangement is telecommuting—work

carried out in a location that is remote from central offices or
production facilities, where the worker has no personal contact with
coworkers, but is able to communicate with them using electronic
means (Gupta, Karimi, & Somers, 1995).
As of late 1997, roughly 11 million US workers telecommuted, a 30%
increase since 1995, according to a study by AT&T (Jackson, 1997). Two
of every three Fortune 500companies now employ telecommuters.
 Organisational structure - the demand for flexibility

CIPD Definition:

Flexible working’ describes a type of working arrangement which gives

a degree of flexibility on how long, where, when and at what times
employees work.
Organisational structure - the demand for flexibility

Flexible working practices include:

• Part-time working: work is generally considered part-time when employers are contracted to
work anything less than full-time hours
• Term-time working: a worker remains on a permanent contract but can take paid/unpaid
leave during school holidays
• Job-sharing: a form of part-time working where two (or occasionally more) people share the
responsibility for a job between them
• Flexitime: allows employees to choose, within certain set limits, when to begin and end work
• Compressed hours: compressed working weeks (or fortnights) don't necessarily involve a
reduction in total hours or any extension in individual choice over which hours are worked.
The central feature is reallocation of work into fewer and longer blocks during the week
Organisational structure - the demand for flexibility
• Annual hours: the total number of hours to be worked over the year is fixed but there is
variation over the year in the length of the working day and week. Employees may or may
not have an element of choice over working patterns.
• Working from home on a regular basis: workers regularly spend time working from home.
• Mobile working/teleworking: this permits employees to work all or part of their working
week at a location remote from the employer's workplace.
• Career breaks: career breaks, or sabbaticals, are extended periods of leave – normally unpaid
– of up to five years or more.
• Commissioned outcomes: there are no fixed hours, but only an output target that an
individual is working towards.
• Zero-hours contracts: an individual has no guarantee of a minimum number of working
hours, so they can be called upon as and when required and paid just for the hours they
work. 
Organisational structure - Benefits for the business
of flexibility
CIPD research demonstrates that flexible working leads to direct and
indirect business benefits.
The direct business benefits are associated with
• Savings on the real estate, for example, facilitated by the technological
advances that allow remote working and hot desking arrangements
• A better match of business resources with the demand for services, for
example, to deliver service to customers on a 24/7 basis
• multi-skilling, free-lance and part-time working, and alternative shift
patterns can be aimed at increasing efficiency and are sometimes
referred to as ’agile’ working'.
https://www.cipd.co.uk/knowledge/fundamentals/relations/flexible-working/factsheet - Accessed 29/08/17
Organisational structure - Benefits for the business
of flexibility
Indirect business benefits are achieved through an improved employee
psychological contract.
An employee survey carried out for the CIPD by Kingston University/Ipsos
MORI Working life: employee attitudes and engagement 2006 found that
‘workers on flexible contracts tend to be more emotionally engaged, more
satisfied with their work, more likely to speak positively about their
organisation and less likely to quit’.
Flexible working options can also be attractive for new talent, especially as
employee expectations change with regard to their jobs, careers and work-
life balance, and demographic changes affect employees’ needs to balance
their job with other responsibilities such as caring
www.cipd.co.uk/knowledge/fundamentals/relations/flexible-working/factsheet - Accessed 29/08/17
Flexibility in organisations
Flexibility in organisations is necessary for providing them a decent and conducive work
environment. A flexible organisation:
• does not have any unwanted or unnecessary restrictions or rules that can have a negative
effect on the morale of the employees
• aims at making work fun and enjoyable and easier for the workers – aids motivation

The following are the kinds of flexibility in a flexible organizational structure:

• Location flexibility
• Skills flexibility
• Work pattern flexibility
• Legal flexibility
• Job flexibility
Flexibility in organisations
• Location flexibility would enable employees to work from the location
of their choice
• Work pattern flexibility and job flexibility will help them do job at
which they are good at
• legal flexibility can make some management and structural changes
which are essential for the firm's growth
• Skills flexibility allows the organisation to bring an employee working
on a different task-work onto special projects so that their ability can
prove to be useful in completing a project successfully

Flexible structures can be the best way for speeding up the learning
process
Flexibility in organisations - Disadvantages
Although there are many advantages of flexible structure, there are
also some problems associated with it.

• Excessive freedom can lead to lower level of commitment and loyalty

issues by the employees and some lack of discipline in work
• Many times, in a flexible structure, individual achievements get more
focus in terms of importance than the success of the entire team
• This means that employees work for their own success ,and not for
the team or company
Flexible Organisation Characteristics
Researchers suggest that in flexible organisations we can see the
following trends

• Increased coordination between senior management and junior level

staff
• Providing services in different geographical areas of the country
Existence of special purpose teams that can be dissolved after target
competition
• Improved efficiency and complete customer satisfaction
Any Questions?
Essential Reading
Bhattacharyya, D. K. (2009) Organisational Systems, Design, Structure
and Management, 1st ed), Himalaya, Mumbai.

Buchanan, D. A. & Huczynski, A.A. (2013) Organisational Behaviour:

An Introductory Text (8th ed), Prentice Hall, Hemel Hempstead.

Handy, C. (1993) Understanding Organisations, (4th ed) Penguin,

London.
Recommended Reading
Boddy, D. (2011) Management: An Introduction. (5th.ed), Prentice Hall,
Hemel Hempstead.
Galbraith, J. (2014) Designing Organisations: An Executive Briefing Based
on Strategy, Structure and Process, (3rd ed), Jossey-Bass.
Gerstein, Marc S., David A. Nadler, and Robert B. Shaw
(1992), Organizational Architecture, Jossey- Bass Publishers, San Francisco.
Main, J, (1988) "The Winning Organization" Fortune, Vol 118, Sep 26, 1988,
pp. 50-55.
Mullins, L. J. (2016) Management and Organisational Behaviour. (11th
ed), Pearson, Cambridge.