Organizational Designs and Employee Behavior

We opened this chapter by implying an organization’s structure can have significant effects on its members. What might those effects be?

A review of the evidence leads to a pretty clear conclusion: You can’t generalize! Not everyone prefers the freedom and flexibility of organic structures. Different factors stand out in different structures as well. In highly formalized, heavily structured, mechanistic organizations, the level of fairness in formal policies and procedures (organizational justice) is a very important predictor of satisfaction. In more personal, individually adaptive organic organizations, employees value interpersonal justice more.41 Some people are most productive and satisfied when work tasks are standardized and ambiguity is minimized—that is, in mechanistic structures. So, any discussion of the effect of organizational design on employee behavior has to address individual differences. To do so, let’s consider employee preferences for work specialization, span of control, centralization, and predictability versus autonomy, as well as preferences specific to certain cultures.42

Work Specialization

The evidence generally indicates that work specialization contributes to higher employee productivity—but at the price of job satisfaction. However, work specialization is not an unending source of higher productivity. Problems start to surface, and productivity begins to suffer, when the human diseconomies of doing repetitive and narrow tasks overtake the economies of specialization. As the workforce has become more highly educated and desirous of jobs that are intrinsically rewarding, we seem to reach the point at which productivity begins to decline as a function of specialization more quickly than in the past. While decreased productivity often prompts companies to add oversight and inspection roles, the better answer may be to reorganize work functions and accountability.43

Span of Control

It is probably safe to say no evidence supports a relationship between span of control and employee satisfaction or performance. Although it is intuitively attractive that large spans might lead to higher employee performance because they provide more distant supervision and more opportunity for personal initiative, research fails to support this notion. Some people like to be left alone; others prefer the security of a boss who is quickly available at all times. Consistent with several of the contingency theories of leadership discussed in Chapter 12, we would expect factors such as employees’ experiences and abilities, and the degree of structure in their tasks, to explain when wide or narrow spans of control are likely to contribute to performance and job satisfaction. However, some evidence indicates that a manager’s job satisfaction increases as the number of employees supervised increases.

Centralization

We find fairly strong evidence linking centralization and job satisfaction. In general, less centralized organizations have a greater amount of autonomy, and autonomy appears positively related to job satisfaction. But again, while one employee may value freedom, another may find autonomous environments frustratingly ambiguous.

Predictability versus Autonomy

We can draw one obvious insight: people don’t select employers randomly. They are attracted to, are selected by, and stay with organizations that suit their personal characteristics.44 Job candidates who prefer predictability are likely to seek out and take employment in mechanistic structures, and those who want autonomy are more likely to end up in organic structures. Thus, the effect of structure on employee behavior is undoubtedly reduced when the selection process facilitates proper matching of individual characteristics with organizational characteristics. Furthermore, companies should strive to establish, promote, and maintain the unique identity of their structures since skilled employees may quit as a result of dramatic changes.45

National Culture

Research suggests national culture influences the preference for structure.46 Organizations that operate with people from high power-distance cultures, such as Greece, France, and most of Latin America, often find their employees are much more accepting of mechanistic structures than are employees from low power-distance countries. So consider cultural differences along with individual differences when predicting how structure will affect employee performance and satisfaction.

Finally, the changing landscape of organizational structure designs has implications for the individual progressing on a career path. Research with managers in Japan, the United Kingdom, and the United States indicated that employees who weathered downsizing and resulting hybrid organizational structures considered their future career prospects diminished. While this may or may not have been correct, their thinking shows that organizational structure does affect the employee and thus must be carefully designed.47

Watch It

If your professor has assigned this, go to the Assignments section of mymanagementlab.com to complete the video exercise titled ZipCar: Organizational Structure.

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