Organization Behavior

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Structure leads to Culture and Behavior

Organizational structure is often and mistakenly taken as the organization hierarchy and who reports into who; my boss always say that organization chart represents who get more money. The reality is that Organizational structure sets the culture and behavior of people inside the organization and how they deal with their clients.

Different type of organizational structure will lead to different types of culture of the organization, it will affect how the culture of the people fitting in those vacancies and jobs and thus will for sure affect the behavior of individuals among themselves and with their clients and partners.

For Example, Modern organizations like Pinnacle sets division that reflect our Go to Market offering, we have no hierarchy, just a circle of knowledge. When I mentioned my Boss in the first paragraph, I meant my friend, business mentor, and advisor, he has never been a boss the way we used to define bosses. The way our organization structure created a culture of collaboration and innovation with knowledge sharing. Thus the way we behave together as a consultants and employee is always reflecting trust, collaboration and making impact; it is our company. This has reflected on the way we deal with our clients, we are friends, one of their staff, we care about people and making them learn and get value of every encounter with Pinnacle.

Organization Behavior

Who are organizational consultants and what do they do?

You need Organizational Consultants, to link your business goals and objectives with the way you set your organization to perform. Organizational consultants are professional calibers with the knowledge to be responsible for enhancing the workplace based on research and the application of psychology principles. They often work closely with company management to solve common business-related issues through reorganization. Their services are required in employment settings when a difficult situation arises and there is no evident resolution. According to the U.S. Bureau of Labor Statistics (BLS), these specialists screen, train, and counsel applicants for jobs, as well as perform organizational development and analysis.

Organizational consultants use many evaluating processes to enhance the workplace this article will cover two of them.

Organizational Behavior

Organizational behavior provides a rational thinking about people and their behavior. The major objective of organizational behavior is to explain and predict human behavior in organizations, so that result yielding situations can be created.

The study of organizational behavior includes areas of research dedicated to improving job performance, increasing job satisfaction, promoting innovation, and encouraging leadership. Each has its own recommended actions, such as reorganizing groups, modifying compensation structures, or changing methods of performance evaluation.

Organizational consultant depends on Organizational Structure to adjust and enhance the business they are working on or with. The organizational structure is the system that outlines how certain activities are directed to achieve the goals of an organization. These activities can include rules, roles, and responsibilities.

Organizational structure also determines how information flows between levels within the company. For example, in a centralized structure, decisions flow from the top down, while in a decentralized structure, decision-making power is distributed among various levels of the organization. Having an organizational structure in place allows companies to remain efficient and focused.

Understanding Organizational Structures

Businesses of all shapes and sizes use organizational structures heavily. They define a specific hierarchy within an organization. A successful organizational structure defines each employee’s job and how it fits within the overall system. Put simply, the organizational structure lays out who does what so the company can meet its objectives.

This structuring provides a company with a visual representation of how it is shaped and how it can best move forward in achieving its goals. Organizational structures are normally illustrated in some sort of chart or diagram like a pyramid, where the most powerful members of the organization sit at the top, while those with the least amount of power are at the bottom.

KEY TAKEAWAYS

  • An organizational structure outlines how certain activities are directed to achieve the goals of an organization.
  • Successful organizational structures define each employee’s job and how it fits within the overall system.
  • A centralized structure has a defined chain of command, while decentralized structures give almost every employee receiving a high level of personal agency.

Not having a formal structure in place may prove difficult for certain organizations. For instance, employees may have difficulty knowing to whom they should report. That can lead to uncertainty as to who is responsible for what in the organization. Having a structure in place can help with efficiency and provide clarity for everyone at every level. That also means all departments can be more productive, as they are likely to be more focused on energy and time.

Types of Organizational structure:

Centralized Versus Decentralized Organizational Structures

An organizational structure is either centralized or decentralized. Traditionally, organizations have been structured with centralized leadership and a defined chain of command. The military is an organization famous for its highly centralized structure, with a long and specific hierarchy of superiors and subordinates.

There has been a rise in decentralized organizations, as is the case with many technology startups. This allows companies to remain fast, agile, and adaptable, with almost every employee receiving a high level of personal agency.

Functional Structure

Four types of common organizational structures are implemented in the real world.

  1. Functional structure, the first and most common is a functional structure. This is also referred to as a bureaucratic organizational structure and breaks up a company based on the specialization of its workforce. Most small-to-medium-sized businesses implement a functional structure. Dividing the firm into departments consisting of marketing, sales, and operations is the act of using a bureaucratic organizational structure.
  2. Divisional or Multidivisional Structure, the second type is common among large companies with many business units. Called the divisional or multidivisional structure, a company that uses this method structures its leadership team based on the products, projects, or subsidiaries they operate. A good example of this structure is Johnson & Johnson. With thousands of products and lines of business, the company structures itself, so each business unit operates as its own company with its own president.
  3. Flatarchy Structure, is a newer structure, is the third type and is used among many startups. As the name alludes, it flattens the hierarchy and chain of command and gives its employees a lot of autonomy. Companies that use this type of structure have a high speed of implementation.
  4. Matrix Structure, the fourth and final organizational structure is a matrix structure. It is also the most confusing and the least used. This structure matrixes employees across different superiors, divisions, or departments. An employee working for a matrixed company, for example, may have duties in both sales and customer service.

Putting an organizational structure in place can be greatly beneficial to a company. The structure not only defines a company’s hierarchy, but it also allows the firm to lay out the pay structure for its employees. By putting the organizational structure in place, the firm can decide salary grades and ranges for each position.

The structure also makes operations more efficient and much more effective. By separating employees and functions into different departments, the company can perform different operations at once seamlessly.

organizational structure in place

Conclusion...

As a businessman or a leader, you do not have to know how to build the right structure to serve your business goals and objectives, no one know it all. Not every HR professional can advise on the right Organizational Structure, they mostly can help implementing it; but designing it is a different game. This is where Organizational Consultants and Organizational Restructuring consultants comes in place.   

How can you find the best time to reorganize your organization structure but know; after COVID -19 outbreak, the situations in the labor market, competition, cost elements, and new market norms and dynamics mandates setting up agile organizational structure, flexible and resilient to the changes happening now. it is the time to restructure your organization whither it is big or small so that you become more competitive and able not only to survive but also to grow.

Change your structure, change your culture, change your behavior so that you can fit what is happening around you and your business.

In Pinnacle we understand the challenges business face with the current dynamics, we have been helping organizations big and small to be able to face the storm of economic effect of Coronavirus by being able to assess the situation based on Lean Six Sigma methodology, then define the best strategy moving forward.

Please use contact us and one of our business development managers will be calling you to support

Pinnacle® is a multi-country consultancy firm. Our consultants are spread around the world; we are divers organization with 70% of our consultants women and 14 nationalities. We have built our organization on modern business model with agility, diversity, and resilience to the business dynamics. We have chosen our technology platform to support our modern mindset thus we work from anywhere …. As work is not a place anymore. We implement Lean Six Sigma in everything we do whether internally or externally at our client sites. 

This article is written by:
Abbeya Elessawy
Abbeya Elessawy
Pinnacle Organizational Consultant
Pinnacle Ltd.

Pinnacle Ltd. is a multi-countries modern consultancy firm, with offices around 13 countries in 4 continents, and 34 consultants working remotely and virtually managed.

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