The Importance of Organization Structure on Productivity Abstract

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TheImportance of Organization Structure on Productivity


Thispaper explores the question of the importance of having a suitableorganizational structure to an organization. The discussions arebasedon a survey of relevant literature. The results reveal that,indeed, body structure is pivotal to group productivity, efficiency,and interest of all the shareholders, including the managers, theemployees, and the owners. Three forms of organization structureshave been noted: the hierarchical structures, the flatter structures,and the leaderless organization structure. Each of these structureshas certain inherent strengths and weaknesses. The ability of any ofthese structures to benefit a company depends on the variousinstitutional attributes such as the size, organizational structure,and nature of the operations. Any suitable organization structure isplaced to guarantee group productivity, efficiency, employeerelations, motivation, engagement, and secure change managementprocesses, among others.Nevertheless, considering the dynamics of theworkplace environment and the growing demands of the human resource,the flatter, and leaderless organizational structures areincreasingly gaining popularity over hierarchical structures,motivated by the desire for human resource autonomy, employeeengagement, and flexible communication, catalyzed by theory Xpremises. Therefore, the contemporary organizations should be keen toconsider various operation aspects and choose a structure that wouldoptimize outcomes.

KeyWords: Importance/Significance, Organization Structure, Businesses

TheImportance of Organization Structure on Productivity

Theconditions of the evolving world present themselves as a significantchallenge to the social and economic development of the modern worldfor which the society must be concerned about. To businessorganizations, these problemsmainly imply there is a need to changethe operation strategies to keep abreast the social and economicdynamics. Indeed, it is indisputable that the underlying problems arevaried and have far-reaching consequences on their success. One ofthese difficulties is increasing competition that requires firms toseek the creation of edging competitive advantages throughcost-efficiency. Another challenge is economic uncertainties thatdemandfirms to adopt commensurate risk management and survivaltechniques. Market regulations, characterized by tax laws and thecalls to uphold social and environmental responsibility, have alsoincreased, implying firms must now be cautious about their practicesmore than ever lest they be penalized. The situation has eliciteddiscussions on just what companies should do to be successful amidstall these challenges. While suggestions for businesses to achievesuccess are varied, the recommendation for proper organizationstructure is perhaps notable. Indeed, literature discussionssupporting the need for appropriate organization structure are alltoo familiar. Organizations, regardless of whether they arefor-profit or non-profit, do not have any choice to of operatingefficiently without a proper body structure. This paper discusses theimportance of having an appropriate organization structure oninstitutional productivity.


Tounderstand the requirements of future leadership, this conducted abrief systematic review of the online literature. First, the searchstrategy is guided by the combination of the keywords‘importance/benefits/significance of organization structure’. Itwas hoped that combination would comprehensively define thesubstantial literature addressing the issue. The search for thesources would entail the use of the Google engine. The choice of thesearch engine is premised on its perceived popularity of beingefficient, responsive and accommodating large forms of informationpublished from diverse backgrounds.

Indeed,the search will yield different types of online material and thathaving a criterion defining information to be included was essential.The elements of particular interest were relevance and validity. Tofulfill such requirements, theonly peer reviewed sources, preferablyjournals are considered. Moreover, considering the source,publication timelines are also crucial in depicting how a coveredtheme suits the current trends, only sources published within thelast 5 year were included in the review assessment. The final searchprocess yielded several sources such as the periodicals, books, blogsand newspaper and magazine articles, including open and closesources. Their examination produced a variety of themes regarding theimportance of organization structure on teams.

TheImportance of Appropriate Organization Structure

Thediscussions in literature avow that body structure supports groupproductivity in different ways, but the gains depend on the nature ofstructure to acertain extent. First, the discussions present threenotablebody structures: the hierarchical, flatter, and leaderlessstructures.The emergence of the concept of ‘leaderless’ group hasbeen dramatic and has invited the question the place of scientificmanagement in practice. The concept of ‘leaderless’ groupprimarily describes a management approach in which there is no realleader or boss, giving an allowance for thesubject to serve as aleader and manager through self-regulation, favoring decentralizedsystem. The popularity of ‘leaderless’ organization is growingrapidly, but has been met with divided views on its ability tobenefit society, compared with conventional centralized managementsystems.

Theviews expressed by Brafman and Beckstrom (2012) are perhaps the mostwidely inferred in assertions in favor of leaderless organizations.In their discussion, Brafman and Beckstrom (2012) explore thesignificance of the emergence of decentralized organized such asYouTube, Wikipedia, and Grokster, which are contrasted withcentralized organizations such as Encyclopædia Britannica. They alsoprovide historical examples of decentralized forms of organizationssuch as Apaches and Alcoholics Anonymous, delving into the analysisof their nature, in comparison with centralized and decentralizedsystems. The authors draw a distinction between the traditional‘spider’ management approaches characterized with linear andtop-down structures and ‘starfish’ management strategies that aredecentralized and heavily guided by peer-to-peer relationships. Theauthors present several advantages of leaderless organizations overcentralized systems, including the ability to accommodate chaos,increased participations, information sharing is open, and people aremore inspired to work creatively to realize success. Based on thesebenefits, the authors encourage organizations to move away fromcentralized structures to fully decentralized or hybridized toincrease the capability to meet their goals efficiently.

Thediscussion supporting leaderless organization is also reflected inJeffrey Nielsen (2013), in TheMyth of Leadership: Creating Leaderless Organizations.The author begins by acknowledging that the contemporary groups arenot only so dynamic, but have also complicated that call they callfor a rethink for the hierarchical approaches to management oforganizations, which have been rendered ineffective. The author notesthe hierarchical approaches have limited individuals in theorganizations the opportunities of sharing and contributing towardsthe success of team, cohesive and productivity. Considering thatpeople cannot contribute effectively towards team success unless theyare joyous, he notes that this joy is only likely to arise when thereis equality, which breeds open communication and sharing of ideas tothe best interest of the organizations. Nielsen lauds leaderlessgroup management approaches, which he sees to drive opencommunication and cooperation that deliver success. On the contrary,centralized systems are particularly unfavorable because they do notrecognize the self-worth of all the employees, and only createtension using the rank-based assumptions.

Whileleaderless management approach is acknowledged as being beneficial,some authors have asserted it could be limited in many respects. Oneof the disadvantages is the challenge to focus the organization`sactivities to the set vision. Lunenburg (2012) considers that visionis a crucial aspect of effective management, and having a centralizedstructure is more advantageous than a decentralized structure becauseit aligns all the levels of the organization with the set vision andpurpose. The centralized systems are more efficient becausetheycreate the allowance for the managers to set the ideas andcommunicate strategies to the employees, establish standards toenable employees to work in one direction. The limitation of thedecentralized system is its inherent inability to make fastdecisions. Because there are many people involved in makingdecisions, reaching a consensus is likely to take long and hinderdevelopment. Therefore, the centralized system emerges as moreadvantageous because only a few people within the management teamsparticipate in making decisions for the rest of the organization, andthis can be achieved relatively fast. Moreover, according to Ja´n Za(2014), the leaderless groups are more likely to be chaotic becausemembers have diverse views, and each party is interested in havinghis/her views heard. Those whose views are not adopted may becomedisgruntled and discouraged, feeling sidelined. Besides, there is aproblem with control and accountability. This view follows that, inthe case of any organization problem, there are not particularpersons to bear responsibility. Under these circumstances, thecentralized structures have been advocated as being more beneficial.

Itseems the issue of the leaderless organization plays effectively intheory X and theory Y, too. As discussed by Olugbenga (2014), on theone hand, the leaderless group concept is favored by theory X, whichasserts that employees are always happy and self-driven to worktowards the organization goals with great responsibility. This theorypostulates employees are intrinsically motivated and always seek toaccept responsibility, and treat work as a natural part of thelifecycle. Therefore, they can work efficiently under thedecentralized organization structure. In contrast, they Y assertemployees lack self-motivation and dislike work. Therefore, they needclose supervision and are likely to achieve the best results underthe centralized management structure. As it turns out, theorganization structures based on Theory X are familiar and servedifferent human resource needs as discussed in the subsequentsections.

OrganizationStructure and Employee Engagement, Motivation and Retention andCommunication

Discussionshave pointed out that teams need to have an elaborate body structureto realize their goals. An appropriate body structure helps themanagement to manage group operations efficiently by creating anallowance for the responsibilities of each individual to be clearlydefined. Teams that lack a proper organization structure mayexperience role confusion and non-commitment to tasks as employ shiftblames. According to Lunenburg(2012),bodystructure is essential for supporting communication. A well-designedorganization structure outlines the communication and reportingprotocol. For instance, the employees may report issues to the headof the department, which may further report to the top manager.Therefore, when such a structure lacks, communication is likely to beconstrained. The failure in communication may culminate inorganization conflicts. According to Olugbenga(2014),organization structures fits into team needs. Ideally, organizationshave different functional and specialized units. The best way ofmanaging these various specialize units and the staff within them isby organizing them into organizations structures.

Besides,body structure, especially the kind modeled on Theory X, is a recipefor effective human resource management. Employee turnover is one ofthe critical challenges that the contemporary organizations arefacing. The issue has far-reaching consequences on group productivitybecause it does not only result in the loss ofresourcefulindividuals, but also increased theworkload for theremaining workforce. Moreover, organizations are compelled to expendresources to hire new staff. The focus of the organizations isachieving and maintaining sustainable growth and productivity. Thediscussions have lauded organizations structures as critical foraddressing turnover by guaranteeing employee engagement, motivation,and retention.

Theprimary focus for the element of power is granting desirable levelsof autonomy for the employees to enable them to make decisions arebeneficial to the healthcare delivery and individual wellbeing. Sincethe lack of independence is one of the complaints of the employees, adesirable power structure would be the kind that convenientlyrestrains the overinfluence of the top management while according tothe employees the flexibility and freedom to act and participate inthe critical decision-making process. Gobal and Chowdhury (2014)endorse different strategies for creating workforce involvement tocreate a convenient power balance, which Organizations shouldemulate: delegating roles and responsibilities, consulting allemployees in making managerial decisions and creating organizationforums allowing the nursing staff to engage in a constructive ideasharing to improve organization effectiveness. Besides, as Rawat(2015) suggests, the influx of the Generation Y workforce into thenursing workplace should warrant adoption of creative and engagingstrategies. This workforce has been noted to be particularlydemanding in terms of self-expression autonomy (Rawat, 2015).Therefore, it should be engaged using creative, unorthodox techniquescharacterized by less formalism, including managing them using asupportive organization structure.

Organizationstructure also supports the convenience of employee engagement.Several articles have discussed that employee engagement will stillbe important and that leaders will be required to be activelyinvolved in facilitating this process (Pless and Maak, 2012 Plessand Maak, 2012 Binney, 2015). For instance, Pless and Maak (2012)acknowledge that the processes of supervising human resource can be adaunting task and proceeds to discuss how one can keep the staff.Motivating and recognizing the employees for their efforts enablesthem to remain part of the organization and be committed to the teamgoals. Leaders that create an appealing work environment andsupportive organization structures retain employees committed togroup goals. Pless and Maak (2012) further suggest various ways thatfuture leaders will engage employees, including training anddevelopment, motivation, collaboration, and teamwork.

Differentmotivation approaches could increase productivity and supportemployee well-being by providing a proper organizations structure.Their theoretical bottom-line is the work-life balance as a crucialcomponent of productivity. The article defines work-life balance as astate at which one is satisfied with work and can function well atwork, as well as at home without experiencing conflicts in roles. Theauthor further discusses that Work-life balance has long been hingedon the role stress theory, which advocates that lack of balancebetween work and family life would result in low productivity. Theauthor discusses how work-life balance concept has been abstractedfrom employee job satisfaction. The ability to be satisfied with jobsatisfaction is always related to environment conditions, thedemographics of the organization, the work offers, nature of work anddepartments. In light of this observation, the author recommends thataspiring leaders will need to be involved in creating a desirablework-life balance, recognizing diverse employee needs, and seeking toengage them.

Binney(2015) offers a description of the core elements linked to innovationstrategies at work. One of its important areas of focus is how toincrease the human resource capacity to improve productivity throughproviding an elaborate organization structure. The authoracknowledges the presence of arguments in advocacy of improvement ofthe quality of work from various perspectives, including theeconomic, social, cultural, and ethical point of view. Regardless ofwhether improving the quality of work life is demanding or catalystsof individual development enhanced work-life remains an importantprocess of achieving organization productivity. The article proceedsto discuss the importance of autonomy in assuring enhanced work lifeand group productivity. Improving work life also tends to be anobligatory responsibility rather than discrete The futureorganization environment will demand theestablishment of elaboratework-life regulations such as limited working time, adequate income,job security, safety, and health at work, social protection, skills,and competence. Therefore, future leaders will need to focus onaddressing these areas such as through having an elaborateorganization structure (Binney, 2015).

Poorbodystructure also constrains leadership, which most cited barrier toinnovativeness in SMEs. Nielsen(2013)forinstance, notes that many SMEs are lagging behind in innovativenessbecause of the lack of commitment from the leaders and managers.Leaders and managers favor rigid organization structure. Many leadersand managers lay emphasis on traditional techniques of optimizing theuse of resources, rather than seeking new, innovative ways oforganization management. Lunenburg(2012)discusses that many SMEs have a weak team culture that are notelaborate for innovativeness. Some of the notable areas of weaknessesinclude poor body structures that limit open communication, inhibitcreativity and sharing of ideas, and fail to motivate the staff togive its best for the benefit of organizations.

Theinnovations and technological environment is a rapid one and oftentends to find the market unprepared in terms of skills. Therefore, bythe time the market starts adapting and embracing the innovations, itis often late. The author mainly reports that as significant as 32percent of SMEs in the world lag in innovativeness because of thelack of supportive structures. Besides, Nielsen(2013) notesthat many SMEs are always slow to bring their staff to the speed ofinnovation through communication and training.The problem of delayedchange adoption and sharing of necessary knowledge on innovation iscommon in firms with complicated, hierarchical organizationstructures.


Inconclusion, this paper has explored the importance of having anelaborate organization structure on organization. Thediscussions is based a survey of relevant literature. The studyreveals that, indeed, body structure is pivotal to groupproductivity, efficiency, and interest of all the shareholders,including the managers, the employees, and the owners.

Threeforms of organization structures have been noted: the hierarchicalstructures, the flatter structures, and the leaderless organizationstructure. Each of these structures has certain inherent strengthsand weaknesses. For instance, the hierarchical organizationstructures has been cited to be convenient because it is based onscientific management principles and outlines certain tasks andprotocols that members should observe to assure efficiency. However,they are rigid and can sometimes impede communication. Flatter andleaderless structures address some of the limitations of hierarchicalstructures, but have certain limits, too. The ability of any of thesestructures to benefit a company depends on the various institutionalattributes such as the size, organizational structure, and nature ofthe operations. Any suitable organization structure is placed toguarantee group productivity, efficiency, employee relations,motivation, engagement, and secure change management processes, amongothers.

Nevertheless,considering the dynamics of the workplace environment and the growingdemands of the human resource, the flatter, and leaderlessorganizational structures are increasingly gaining popularity overhierarchical structures, motivated by the desire for human resourceautonomy, employee engagement, and flexible communication, catalyzedby theory X premises. Therefore, the contemporary organizationsshould be keen to consider various operation aspects and choose astructure that would optimize outcomes.


Binney,E. (2015).TransformationalLeaders Will Rule the 21stCentury.Societyfor Human Resource Management.PenguinBooks

Brafman, O&amp Beckstrom, R. (2012).TheStarfish and the Spider: The Unstoppable Power of LeadershipOrganizations.Penguin Books

Gobal,R. &amp Chowdhury, G. (2014). Leadership Styles and EmployeeMotivation: An Empirical Investigation in a Leading Oil Company inIndia. Internationaljournal ofresearch in business management,2 (5) pp. 1-10.

Ja´nZa´, B. (2014).Centralizedand Decentralized Decision Making in Organizations.Universityof Southern California and Queen’sUniversity

Lunenburg,F. (2012). Mechanistic-Organic Organizations—An Axiomatic Theory:Authority Based on Bureaucracy or Professional Norms. InternationalJournal Of Scholarly Academic Intellectual Diversity4(1): 23- 34

Nielsen,J. S. (2013). Themyth of leadership: Creating leaderlessorganizations.Boston,MA: Nicholas Brealey Publishing.

Olugbenga,A. (2014). Applicationof Motivation Theories in the Construction Industry. OSRJournal of Business and Management.16(7): 2319-2324

Pless,M.N. &amp Maak, T. (2012). Responsible Leadership: Pathway to theFuture. Journalof Business Ethics,Vol. 98, pp. 3-13.

Rawat,S. R. (2015). Impact of transformational leadership over employeemorale and motivation. IndianJournal of Science and Technology,8, 25-34.