Using key Elements of Organizational Structure

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Using key Elements of Organizational Structure

Using key elements of organizational structure, critically analyze how organizational structure can impact an organization’s HR Policies and practices. Please use examples to illustrate your arguments.

Introduction

The organizational structure is the element that refers to the system used by the companies to arrange their various departments and the way it is reported to the authority. As per Armstrong & Taylor, some companies are known to build the structure of their organizations by dividing them into different functions like finance and marketing so that the skills and knowledge can be combined (Armstrong & Taylor, 2014). But some retail companies use the approach of product organizational structure so that they can focus better on the particular lines of the products. Whatever might be the case, each organization structure is known to consist of some of the key elements in common such as:

  • The hierarchy of the company
  • The span of control
  • Division of the work
  • Geographical distribution of the functional areas

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The significance of organizational structure and its relationship to HRM

Significance of the organizational structure

The small-scale industries are known to use one of the following two types of organizational structure which include the functional and the product. The areas included under the functional are marketing and reporting the business either to the CEO or the president of the functional organizational structure. As per Brewster, Mayrhofer & Morley, the structure of products is in use when numerous products or brands are sold by the company. It is very significant for companies in finding out the organizational structure that best suits their company needs (Brewster, Mayrhofer & Morley, 2016).

Key elements of the organization

The following are some of the key elements of the organization structure which are described below:

Functioning: The most important criteria are the making of the decision which is known to be the main function of the organizational structure so it is specifically important. Most of the companies will be having either a tall or flat organizational structure. As per Brewster, Mayrhofer & Morley, the companies of small scale will be using the flat organizational structure. For instance, the manager of the company can directly report to the president rather than the director, and his assistants will be only at two levels underneath the president (Brewster, Mayrhofer & Morley, 2016).

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The communication:

The significance of the organizational structure is mainly critical for communication. The distribution of authority is enabled by the organizational structure. For instance, when an individual is started with the job he would be known from the first day itself about whom to report regarding his work.

Evaluating the performance of the employee:

According to Purce, for evaluating the performance of the employee the organizational structure is very important. The supervisors are better allowed to evaluate the performance of the subordinates by the linear structure of the functional and product organizational structure (Purce, 2014).

Achieving the goals:

For achieving the outcomes and the goals the organizational structure is specifically important. It is known to allow the chain of command.

Finding the solution:

For managing the changes occurring in the marketplace the organizational structure is known to enable the companies and also provides support in reaching the needs of the customer, government regulation, and the advancement in technology (Mello, 2014).

Organizational structure relates to Human resource management

One of the basic challenges that are faced by companies of all sizes is its difficulty in determining how the organization of the company can be made along with the staff and how the operations can be organized. This kind of task is noticed to become much more complex when the company has decided to make their business across the globe.

The owner of the small-scale business might start the company with a solo team. In such a case the structuring of the organization and the staffing of the human resource management will be involving only the efficient distribution of the time of that person and his attention to the different tasks that are associated with the business. Ulrich said as the growth of the company occurs, the hiring of employees will increase probably (Ulrich, 2013). When such a situation occurs, then clear observation of the tasks and their allocation to the workers has to be carried out systematically. When a larger growth of the company is observed the company has to be organized into departments for the efficient managing of the human resource management.

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Organizational structure and its relationship to HRM

An owner with one or two workers will not be requiring any type of organizational structure. The structure is found to be more important when the business turns out to be more complex. It is involved in determining the distribution of authority and responsibilities based on specific projects and their goals. As per Nickson, a single organizational concept that is ideal is not known rather the concept of organizational structure that best suits the needs of the company have to be designed and used (Nickson, 2013).

The functional structures: The functions of the employee would be carried out based on the organizational structure which is a very simple concept for the organization of the company. Various functions like finance, human resources, marketing, and internet technology each of which will be having an individual department, and every department will be exclusively focusing on that particular function. According to Nickson, the limitation that is stated by Chip Gizzard is that every single department might get fixed with its functions, its financial plan, and its own goals with no other thought for the organization as a whole (Nickson, 2013).  Even when solutions are required for the issues from another department, they might not get any cooperation. For example, the manufacturing company has some key functions such as marketing, making purchases, production, personnel, and accounting.

The divisional structure: The divisions are the mini-companies that are built on specific products or regions. For instance, a car company will be having one stream of luxury cars and one for economy vehicles, etc.  Every division will be having certain functions which are necessary in handling the business for that particular region or the product line.

The Process structure: The process structure will be dividing the organization into the form of processes which includes manufacturing, sales, and research. As per Nickson, the process-based organization will be considering the various processes and their relation to each other and also with the customer (Nickson, 2013).

The Matrix structure: The Company’s functional structure is covered by the matrix structure for tackling the projects as it is involved with multiple departments. As per Jabbour et al, the project managers will be recruiting the staff for their respective teams from other departments so that all the functions that are required will be working on it together (Jabbour et al, 2013).

By this flexibility is offered by the company and the resources are used in a better way which is better than a complete functional model. For example, the product group is interested in developing a new addition to its product line so for carrying out this project; it recruits workers from the functional departments which include marketing, research, production, and engineering.

Individuals who are working in collaboration in the organization will need the system or the structure that is defined by which the things can be related to each other and with the help of which the coordination can be maintained for the efforts that are being made. The relationships that are defined between the elements of the organization will be including the people, the tasks given, the structure designed, and the processes of control and information systems which are known to characterize the organization and that is referred to as the organizational structure. The mechanical structures are correct for the environments that are static and for the dynamic environments, the organic structures would be appropriate. The formal organization is known to refer to the structure of roles that is intentional in the enterprise that is organized formally (Stredwick, 2013).

The informal organization is known to refer to the activity that is joint personal without being aware of any combined purpose, though the contribution is pointing towards the combined results. As per Alfes et al, the structures are found to be of two types such as tall and flat. The narrow span of control is known to characterize the tall structure, whereas the high span of control is considered under the flat structure (Alfes et al, 2013).

The department of HR is noticed to consist of the jobs such as the facilitator, the specialist as the change agent, and the controller.  According to Riley, the key factors that are responsible for the growth of the company is because of the management by the HR department on the organizational structure over time, their skills, and the knowledge limitations which have been allocated by giving to the authorities and the responsibilities to the workers (Riley, 2014).

Authority is known to refer to the right of giving power and orders to the appropriate individuals. The other aspect of the allocation is responsibility which is found to be the process where the employees are given the responsibility for executing the tasks that have been allocated to the authority. The formal relations have been categorized into the line and the staff relation. There might be conflicts between the line and the staff relations.

If a proper understanding is made between the line and the staff relations, then it will help develop pleasant relationships between the line and staff. Human resource management is found to be the staff function, but it is noticed to be the line responsibility. In recent times, the comparisons between the functions of line and staff have been changing by keeping the changes occurring in the work and business environment.

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Key elements of organizational structure influence HR policies and practice

According to McCort and Eldridge, Human resource management is defined as the approach that is made by the organization to manage its staff and help them in their development. As per the statement of Bratton and Gold, the HRM is defined as the means of achieving effectiveness in the organization by organizing the talent of the employees with the help of the individual programs of HR and their practices while Richardson and Thompson have pointed out that the strategies of the Human Resource are measured with the help of the policies of HR and the practices (Tyson, 2014).

For achieving efficiency in the organization help is obtained from the strategy of HR which coordinates and applies the policies and practices of HR thus the behavior of the people in the organization is influenced. The idea is provided by Jackson and Schuler on how the various structures of the organization are put in shape by the HRM.

The organizational structure is found to depict the full frame of an organization in which the employees will get a clear idea of whom should they report to regarding their work and their respective positions in the organization and what is work allocated to them and when it should be done and how (Knowles, Holton III & Swanson, 2014).

According to Ensign, it is indicated that the organization’s efficacy will be depended on how well it is structured so that it will be giving rise to the problems related to the integration and coordination among the various units of the organization. According to his views, the activities that are carried out in various units have to be coordinated so that the objectives of the organizations are achieved effectively. Cheng has defined the term coordination as how the tasks given to the various employees can be interrelated while Draft states how the structure of the organization will be facilitating the use of the coordination between the employees in providing the best use of where, how, and when it can be used.

Human resource management is influenced by the organizational structure in various ways. As per Hoque, the engagement of the employee that is the behavior of the employee, the work performance of the employee, the satisfaction, the motivation and the kind of passion he has for the work, and the determination are all factors that are influenced by the structure of the organization. This in turn is also known to influence the ability of the employee in achieving the objectives of the organization (Hoque, 2013).

For instance, in an organization that is centralized with a highly bureaucratic structure, the employees are in the stage where they are not able to use the initiatives provided because the tasks are repetitive, so the employees might get discouraged and their performance might be low ultimately the achievements made for reaching the goals of the organization are hampered. As per Budhwar & Debrah, the organizational structure is found to attract employees of certain groups. For instance, the professional bureaucracy is found to attract individuals who are known to be experts in their particular fields and will be willing to control their work and also the decisions made by them (Budhwar & Debrah, 2013).

The HR strategy and practices are also known to be influenced by the organizational structures in various ways. For instance, the manager of HRM will be recognizing the need for a change of policy or to implement a new policy, so they would take their opinion about the procedure, then put it on paper, and then the policy is communicated with the employees. It is very important to make a note that the department of HR is not supposed to work on its own. Evy action taken by them should interact with all the other departments in the enterprise.

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Specific human resource functional areas

As per Kerzner, it is very important to note that the various functions of Human Resource Management are influenced by the key elements of the organization structure as it is known to tasks the performance of the managers of the other departments. Employees are required for performing the tasks and for the work to get done in the organization (Kerzner, 2013). For maintaining the efficiency in the organization, it has to be structured properly in which one of the main tasks of the HRM is Staffing. It is known to involve the whole process of hiring right from posting the job to the point of salary negotiation. In the function of staffing there are the following steps involved:

Recruitment and selection: There is a direct correlation between how the organization will recruit and select appropriate people, which can be noted, and the ability of the company to hire employees and retain them. According to Jackson, Schuler & Jian, if the employees are tenured in the organization for a longer period, then it will allow the company in having less control and structure and will give more freedom to the employees (Jackson, Schuler & Jiang, 2014). If the process of recruiting and selection is effective and solid then the chances of hiring the correct individual are more for the appropriate position and more confidently the individual who is better suited for the job as per the organizational structure is identified.

For instance, one of the top organizations has made the recruiting and selection process effective by choosing the appropriate person who is better suited for their criteria so that the company results can be improved. As per Boella & Goss-Turner, the person has given ideas to improving the services and the quality of the products they produce as they have hired the best employee and have retained them (Boella & Goss-Turner, 2013). The financial status of the organization has also been improved as it has chosen the best people by identifying them, hiring them, and have given them the appropriate training, and retention.

Training and development: The organization has spent time hiring new staff during which they wanted to make sure that they will not only train the employees after recruiting instead they would provide them with the opportunity of continuing in the organization by developing their skills in the job and will continue to grow. As per Alfes et al, the resulting outcome was found to be the productivity in the organization is higher amounts (Alfes et al, 2013). For motivating the employee training is the major component. The individuals will get motivated and will tend to be happier with their job positions if they feel that they are developing their skills. This would ultimately result in increased retention of employees in the same organization for a longer duration of time. For instance, in an organization, the following training programs have been given such as:

  • Training for job skills such as how to make use of a particular computer program and how to run it
  • Communication training
  • Activities that are related to building the team
  • Training in terms of policies and legal issues like ethical training and training on sexual harassment.

Reward management: For increasing the productivity of the employees the organization will be using reward management as the instrument. For retaining employees and attracting them it is used to offer rewards for their performance and achievements. This often creates a challenging environment. For the performance development of the organization, the company is concerned with the rewards of the employees (Marler & Fisher, 2013). A better understanding was established and the organization started achieving the best results for which the organization managed and rewarded if the framework was accomplished within the agreed period as per the company standards and planned goals. For instance, in an organization, if the productivity of the salesperson is more than the expected range then he would be rewarded with a certain percentage of the profits.

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Conclusion

Overall the organizational structure is considered to be a very important criterion that has to be fundamentally made by every organization so that it would have a better plan of organizing its departments with particular responsibilities for the efficient achievement of the organizational objectives. The human resource management team will be set with the particular HR strategies which will be followed by the employees so that they can be retained in the organization for longer tenure by making their growth and development along with the company’s development. It is finally concluded that there is no specific organizational structure every company has to design it according to their requirements that best suits the company.

References

Alfes, K., Shantz, A.D., Truss, C. and Soane, E.C., 2013. The link between perceived human resource management practices, engagement, and employee behavior: a moderated mediation model. The international journal of human resource management, 24(2), pp.330-351.

Armstrong, M. and Taylor, S., 2014. Armstrong’s handbook of human resource management practice. Kogan Page Publishers.

Boella, M. and Goss-Turner, S., 2013. Human resource management in the hospitality industry: A guide to best practice. Routledge.

Brewster, C., Mayrhofer, W. and Morley, M. eds., 2016. New Challenges for European Resource Management. Springer.

Budhwar, P.S. and Debrah, Y.A. eds., 2013. Human resource management in developing countries. Routledge.

Hoque, K., 2013. Human resource management in the hotel industry: Strategy, innovation, and performance. Routledge.

Jabbour, C.J.C., de Sousa Jabbour, A.B.L., Govindan, K., Teixeira, A.A. and de Souza Freitas, W.R., 2013. Environmental management and operational performance in automotive companies in Brazil: the role of human resource management and lean manufacturing. Journal of Cleaner Production47, pp.129-140.

Jackson, S.E., Schuler, R.S. and Jiang, K., 2014. An aspirational framework for strategic human resource management. The Academy of Management Annals8(1), pp.1-56.

Kerzner, H.R., 2013. Project management: a systems approach to planning, scheduling, and controlling. John Wiley & Sons.

Knowles, M.S., Holton III, E.F. and Swanson, R.A., 2014. The adult learner: The definitive classic in adult education and human resource development. Routledge.

Marler, J.H. and Fisher, S.L., 2013. An evidence-based review of e-HRM and strategic human resource management. Human Resource Management Review23(1), pp.18-36.

Mello, J.A., 2014. Strategic human resource management. Nelson Education.

Nickson, D., 2013. Human resource management for hospitality, tourism, and events. Routledge.

Purce, J., 2014. The impact of corporate strategy on human resource management. New Perspectives on Human Resource Management (Routledge Revivals)67.

Riley, M., 2014. Human resource management in the hospitality and tourism industry. Routledge.

Storey, J., 2014. New Perspectives on Human Resource Management (Routledge Revivals). Routledge.

Stredwick, J., 2013. An introduction to human resource management. Routledge.

Tyson, S., 2014. Essentials of human resource management. Routledge.

Ulrich, D., 2013. Human resource champions: The next agenda for adding value and delivering results. Harvard Business Press.

Wilton, N., 2016. An introduction to human resource management. Sage.

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