Organizational structure

Introduction-Organizational structure refers to the formal configuration between an individual

and the group with respect to the allocation of tasks, responsibilities and authority within an
organization. An organization is the structural framework for carrying out the functions of
planning, decision-making, control, communication, motivation, etc. The formal structure of an
organization is two-dimensional-horizontal and vertical. The horizontal dimension depicts
differentiation of the total organizational job into different departments. The vertical dimension
refers to the hierarchy of authority/relationship with a number of levels from top to bottom.
Authority flows downwards along these levels.

Definition-An organizational structure is a system that outlines how certain activities are
directed in order to achieve the goals of an organization. These activities can include rules, roles
and responsibilities.

Purposes of organizational structure

1. To guide the organization work towards its goals.

2. It brings members of the organization together and demarcates functions between them.
3. The structure also helps in ensuring smooth and efficient functioning.
4. Work happens with precise coordination with minimum wastage of resources.
Types of organizational structure
1. Vertical/tall organization structure: This refers to the increase in length of the organization's
hierarchical chain command.
2. Horizontal/flat organization structure: This refers to a broader structure; there are a fewer
levels in the organizational hierarchy of such organizational structures, with a relatively large
span of control.

Development of an organizational structure

1. Clear Definition of Objectives: Achievement of goals can be made possible only with unique
organization structure derived from standard structure layout.

2. Identification and Grouping of Activities: The next step here is to identify activities that
members of the organization have to perform. Since every business activity requires many tasks,
clear identification of them is important. After identification, it is necessary to group these
activities into classes on the basis of their nature.

3. Determination of the Structure: After completing the first two steps, the organizers finally
determine the overall structure. He defines the ranks and hierarchy in which people will function.
4. Revision of the Structure: Once the structure starts functioning, it can show up problems and
shortcomings. For example, the marketing and sales departments often perform similar functions.
Consequently, this can show up difficulties in the clear demarcation of work between them.

Organizational structure: Need and importance

1. Guidance from Organizational Purpose: Organizational structure provides guidance to all

employees by laying out the framework for official reporting and accountability for different
levels of hierarchy that govern the workflow of the company.

2. Significance of Formal Structure: Formal organizational structure helps employees to whom

they officially report to in different situations. Organizational structure improves operational
efficiency by providing clarity to employees at all levels of a company.

3. Flat Organizational Structure: There are relatively few layers of management in what is
termed a flat organizational structure. In a flat structure, front- line employees are empowered to
make a range of decisions on their own. Information flows from the top down and from the
bottom up in a flat structure, meaning communication flows from top-level management to front-
line employees and from front-line employees back to top management.

4. Tall Organizational Structure: In a tall organizational structure, there are numerous layers
of management and often inefficient bureaucracies. In a tall structure, managers make most
operational decisions, and authority must be gained from several layers up before taking action.
Information flows are generally one-way in a tall structure-from the top down.

5. Other Organizational Considerations: It is common for small businesses to lack a solid

organizational structure. All employees in start-up companies can be required to perform a range
of tasks outside of their official job descriptions, and a good number of employees in start-ups
have generous leeway in making decisions.

Factors influencing organizational structure –

1. Size of the unit: Size indicates the scale of operation. Normally, there are three scales of
operation, viz. small, medium and large. Size is an important factor governing cost,
efficiency and profitability of a business enterprise. Before any business or nonbusiness
enterprise is started, the organizers will have to decide the most profitable and viable size
of the unit.

2. Job design: The bricks that build up an organization structure are jobs. The jobs to be
done in an organization are decided by the top brass. Job design is the first managerial
decision of the organizational structure.

3. Grouping of activities: The designed jobs have to be formed into groups according to
the nature of activity. Grouping of activities are essential to achieve coordination. Each
group is termed as a department. Thus, departmentation is another factor which
 determines the organization structure. Thus, in each and every organization, we observe
departments like marketing, production and finance. In each department, we find
authority relationships like finance manager, assistant finance section officer and finance
supervisor, each assigned to a specific job and responsibility to perform.

4. Span of control: Another factor that determines the organizational structure is the
number of persons to be managed by each manager. This is called span of management.
Depending upon the nature of the organization, some departments will be large in size
and some will be small.
5. Delegation of authority: If the span is more, there will be more authority levels and the
top management has to delegate authority to each level. Authority means 'the right to
make decisions without having to obtain approval from a higher up'. In an organizational
structure, if the span and levels of management are more, the delegation of authority will
be more and there will also be decentralization of authority for the smooth functioning of
tasks.
Emerging trends in organizational structures -

Modern management guru, Peter F. Drucker notes that 'organizational structures are becoming
increasingly short lived and unstable'.

1. Job and work patterns are changing.

2. There is a very high mobility of workers. They move from one job to another for better
prospects.

3. The concepts of job security and steady income are losing ground.

4. Outsourcing of employees is increasing. Part-time, contract and self-employed workers are

increasing as a per cent of total employees.

5. Hierarchy levels in organizations are reduced. Organizational structure is downsized. They are
becoming thinner and flatter.

6. Organizations manufacturing or trading products in global markets are restructuring their

organizations.

7. Cost-cutting and enhancing productivity have become mantras of every organization. 8.

Emphasis is on changing technology and developing entrepreneurship.

9. Every organization is becoming a Learning organization. Products and services are becoming
smart. Employers and employees are on their toes to learn new things. Today's products are
losing ground at a faster rate in markets. People are crazy to have new products and services.
Hence, diversification and new product development have become the order in organizations.
10. Emerging organizations are virtual. This means they need not see each other every day. They
communicate with each other through systems like video conferencing.

11. Tomorrow's office will be small. Furniture will be less and used all the time. Much of the
work will be done outside the office. Mutual trust will become a vital factor.

TYPES OF ORGANIZATIONAL STRUCTURE-

1) Tall or Centralized Structure.

2) Flat or Decentralized Structure.
3) Matrix Structure.
4) Adhocracy Structure.
5) Shared Governance.
1. Tall or Centralized Structure
• A Tall organization is named so because a chart of its relationship appears tall and narrow.
• It is also called Centralized, because most of the decision making authority and power is
held by few persons in central positions.
e.g. In an acute care hospital, the nursing position would be that of the chief nursing officer,
with 2 or 3 assistants.
 Tall or Centralized Structure

Advantages Disadvantages

Enables an individual to be an expert in The most skilled individuals may end up

the narrow area over which he or she is doing nothing but supervising, whereas
responsible. those less capable do the actual tasks.

Because the supervisor has fewer people to Those who are closely supervised may feel
supervise, close supervision is possible. stifled and even mistrusted sometimes.

The top level authority is the primary Communication is difficult because it may
decision makers, and has a great deal of pass through many layers.
control over actions of others.

Implementation of decisions may

excessively delay.

2. Flat or Decentralized Structure-

 The chart of relationships shows few levels and a broad span of control.
 Decision making is commonly spread out among many people and those closest to the situation
are given wide latitude in determining appropriate actions.
 Flat or Decentralized Structure
Advantages Disadvantages

There is simplification of communication Managers may lack expertise in wide variety

patterns, flowing easily from lower levels to of operations for which they are responsible
higher levels in a direct manner. and thus make inappropriate decisions.

Greater speed with which the organization If individuals within the organization are not
can respond to problems or new competent their inappropriate decisions and
opportunities, as decisions can be made by actions may do great harm.
those in the situation.

Less chance of communication becoming

lost or distorted as it moves within an
organization.

3. Matrix Structure-

 These structures are most often found in very large, multifaceted organizations.
 Many organizations try to apply principles of business to health care.
 This resulted in the organization of areas around product lines (which focuses on end product of
health care) and service line (represents the tasks required to accomplish the delivery of the
product.

Matrix Structure
Advantages Disadvantages

A team approach to projects or problems

brings together wide expertise and often Leadership conflict
generates more creative solutions

There is flexible use of human resources Lack of understanding of roles and

expectations

The team members learn more about one Confusion, Conflict and Ambiguity
another's concerns and thus improves
working relationships, functional integration.
Communication is also improved by close Time allocation between working for team
contact with all organizational groups. and working for department may become an
issue.
4. Adhocracy Structure-

 This type of structure uses teams of specialists who are organized to complete a particular project
or task.
 These groups are referred to as project team or task force.
 It is composed of highly specialized professionals, the work is delegated by a director to
members of the project team who provide particular expertise.

5. Shared Governance-

 It represents a professional practice model in which the nursing staff and nursing management
are both involved in making decisions as opposed to having the decisions made at an
administrative level only.
 Implementations of Shared Governance.
 It requires the staff nurses participate in professional development designed to increase the
nurse's understanding of decision making, team building, group dynamics, leadership and
budgeting.

Disadvantages:

 Time involved in shared governance is costly to organizations.

 Its cost effectiveness in terms of patient outcomes is questioned sometimes.

ORGANIZATIONAL EFFECTIVENESS

 The product or output of an organization is termed organizational effectiveness (O.E).

 There should be a relationship between organizational effectiveness and performance (O.P).
 Nurse Managers define the goals and provide the resources for both the organizational
effectiveness and organizational performance.
For e.g.-

The dimensions include:

 Patient satisfaction with care

 Family satisfaction with care
 Satisfaction with work
 Staff satisfaction with rewards, intrinsic and extrinsic
 Staff satisfaction with professional development- career, personal and educational
 Staff satisfaction with organization
 Management satisfaction with staff.
 Community relationships
 Organizational

Nurse administrators control these dimensions of organizational effectiveness

 The organization is effective or productive when the people are performing care that meets
client's needs and for which employees have a sense of accomplishment.

An organization can be shaped through:

 Job enlargement that is qualitative meaningful, interesting, and intellectually rewarding.

 Making the structure more manageable. Increasing clinical nurse's autonomy reduces the
organization's size.
 Increasing the span of control of the manager.
 Shortening the hierarchy.
 Involving the employees in participation.
 Decentralization.
 Increasing the employee's stake in his or her own performance.
 Increasing creativity while maintaining fiscal responsibility.
 Replacing direction and control with advice.
 Meeting employees need.

ORGANIZATIONAL CLIMATE

 It is the emotional state and the perceptions and feelings shared by members of the system.
 It can be formal, relaxed, defensive, cautions, accepting, trusting etc.
 It is the employee's subjective impression or perception of their organization.
 It relates to the personality of an organization and can be changed.

Organizational climate, defined differently by many researchers and scholars, generally refers
to the degree to which an organization focuses on and emphasizes:

 Innovation
 Flexibility
 Appreciation and recognition
 Concern for employee well-being
 Learning and development
 Citizenship and ethics
 Quality performance
 Involvement and empowerment
 Leadership

Sociological dimensions of organizational climate

 Clarity in specifying certification of the organizational goals and policies. This is facilitated by
smooth flow of information and management support of employees.
 Commitment to goal achievement through employee involvement.
 Standards of performance that challenge promote pride and improve individual performance.
 Responsibility for one's own work fostered and supported by managers.
 Teamwork- a sense of belonging, mutual trust and respect.

Environmental dimensions of climate

It includes-
-Room attractiveness
-Illumine
-Shape of the furniture

Practicing nurses wants a climate that will give them

-Job satisfaction
-Good working conditions
-High salaries
-Opportunities for professional growth
-Career development experiences that will help them to determine and direct their professional
futures.
-Administrative support that includes adequate staffing and shift options
-To develop their self esteem through self actualization.

Hellriegel and Slocum (2006) explain that organizations can take steps to build a more positive
and employee- centered climate through:

Communication - How often and the types of means by which information is communicated in
the organization
Values - The guiding principles of the organization and whether or not they are modeled by all
employees, including leaders.
Expectations- Types of expectations regarding how managers behave and make decisions
Norms - The normal, routine ways of behaving and treating one another in the organization
Policies and rules - These convey the degree of flexibility and restriction in the organization
Programs - Programming and formal initiatives help support and emphasize a workplace
climate
Leadership - Leaders that consistently support the climate desired

Role of Nurse Managers in Organizational Climate

 Nurse Managers should emphasize management tasks or activities that stimulate motivation in
nursing employees.
 Nurse Managers should establish a management strategy to support new nurses and involve them
in decision making.
 Nurse Managers should establish a climate in which discipline is applied fairly and uniformly.
 Nurse manager will work to establish an organizational climate that provides
-Incentives for clinical nurses,
-Places them on committees,
-Is creative and equitable in all staffing matters:
-Emphasizes pride,
-Promotes participation,
-Rewards seniority and achievements,
-Reduces boredom and frustrations.

 Nurse Managers need management education and training.

(Nurse Managers and practicing nurses can work together to manage the work and the work
environment so that energy channeled into accomplishing personal and organizational goals.)

Activities to promote positive organizational climate

Developing the organization's mission, philosophy, vision, goals and objectives statements with
input from practicing nurses, including their personal goals.
Establishing trust and openness through communication that includes prompt and frequent
feedback and stimulates motivation.
Providing opportunities for growth and development, including career development and
continuing education programs.
Promoting team work.
Asking practicing nurses to state their satisfactions and dissatisfactions during meetings and
conferences and through surveys.
Marketing the nursing organization to the practicing nurses, other employees and the public.
Analyzing the compensation system for the entire organization and structuring it to reward
competence, productivity and longevity.
Promoting self esteem, autonomy, and self fulfillment for practicing nurses including feelings
that their work experiences are of high quality.
Emphasizing programs to recognize practicing nurses contributions to the organization
Assessing needed threats and punishments and eliminating them.
Providing job security with an environment that enables free expression of ideas and exchange of
opinions
Being inclusive in all relationships with practicing nurses
Helping practicing nurses to overcome their short comings and to develop their strengths.
Encouraging and supporting loyalty, friendliness, and civic consciousness.
Developing strategic plans that include decentralization of decision-making and participation by
practicing nurses.
Being a role model of performance desired of practicing nurses.