2.2. Owing to rapid changes in the environment (IT, globalisation, customer needs, etc.), modern
organisations need to be flexible in order to accommodate the changes.
2.2.1. Describe the characteristics of traditional and modern organisations designs.
Traditional (Mechanistic)
– Bureaucratic
– Rigid
– Relies heavily on function and division
• Contemporary/ Modern (Organic)
– Fluid/ flexible (adapts easier to environmental changes)
– Fewer rules and procedures
– Decentralised decision-making
– Emphasis on teamwork and collaboration
– Cross-functional and cross-departmental communication and coordination
– Flatter hierarchies and delegation of authority
– Emphasis on employee empowerment and autonomy
– Emphasis on innovation and creativity
– Customer-centric focus
– Use of technology for efficiency and effectiveness
– Continuous learning and improvement mindset.
To describe the characteristics of traditional and modern organizational designs, we can refer to two broad categories: Traditional (Mechanistic) and Contemporary/ Modern (Organic) designs. These categories highlight the key differences in the structure, cultural orientation, and decision-making processes of the two types of organizations.
Traditional (Mechanistic) Organizational Design:
1. Bureaucratic: Traditional organizations are often characterized by a bureaucratic structure, where decision-making authority is concentrated at the top and flows through a hierarchical chain of command. This centralized decision-making structure helps maintain control and coordination but can lead to slower response times to change.
2. Rigid: Traditional organizations are known for their rigid structures that heavily rely on standardized rules, procedures, and job descriptions. They tend to have strict hierarchies and well-defined authority and reporting lines, which limit employees' autonomy and flexibility.
3. Functional and Divisional Focus: Traditional organizations organize themselves around functional departments (such as finance, marketing, human resources) and divisions based on products, regions, or customer segments. This divisional focus allows for specialization but can lead to siloed communication and coordination challenges.
Contemporary/ Modern (Organic) Organizational Design:
1. Fluid/Flexible: Modern organizations recognize the need to adapt to rapid environmental changes and exhibit a more fluid and flexible structure. They are capable of quickly responding to market demands, technological advancements, and customer needs.
2. Fewer Rules and Procedures: Modern organizations tend to have fewer bureaucratic rules and procedures, emphasizing a more decentralized and agile decision-making approach. This allows for quicker responses to change and encourages innovation and employee empowerment.
3. Decentralized Decision-Making: In contrast to traditional organizations, modern organizations decentralize decision-making authority. This approach distributes decision-making power across the organization, empowering employees at various levels to make timely decisions that align with the organization's goals and adapt to changing circumstances.
Understanding the characteristics of traditional and modern organizational designs can help organizations evaluate their current structure and culture and determine whether they need to make adjustments to better accommodate the rapid changes in the environment.
Traditional (Mechanistic) Organization Design Characteristics:
1. Bureaucratic: Traditional organizations tend to have a hierarchical structure with clear lines of authority and control. Decision-making is centralized, and there is a strict adherence to rules and procedures.
2. Rigid: Traditional organizations have a rigid structure and are resistant to change. They are often slow to adapt to environmental changes due to the bureaucratic nature and complex decision-making processes.
3. Function and division reliance: Traditional organizations are organized based on functional specialization and division of labor. Each department or division has its own set of responsibilities and operates independently.
Contemporary/ Modern (Organic) Organization Design Characteristics:
1. Fluid/Flexible: Modern organizations are designed to be adaptive and respond quickly to changes in the environment. They have a flexible structure that allows for agility and innovation in the face of rapidly changing customer needs, technological advancements, and globalization.
2. Fewer rules and procedures: Modern organizations have a leaner approach to rules and procedures. Instead of strict adherence to prescribed protocols, they emphasize collaboration, creativity, and employee empowerment. This encourages flexibility and reduces bureaucracy.
3. Decentralized decision-making: Modern organizations decentralize decision-making, allowing for quicker responses and more autonomous decision-making by employees. This empowers individuals and teams to take ownership of their work and make decisions at the appropriate level.
Overall, modern organizations prioritize flexibility, innovation, and adaptability over rigid structures and centralized decision-making like traditional organizations. They embrace change and strive to create a dynamic and agile environment to meet the demands of the rapidly changing business landscape.