A clear organizational structure is advantageous for managers because it allows them to efficiently and effectively manage large, complex corporations. The traditional organizational structure was established in the early 20th century and was based on the belief that multilayered bureaucracies were the most effective approach. This structure was necessary due to limitations in transportation, limited education levels among workers, and technological constraints in information collection, display, and transmission. In this system, managers held decision-making responsibilities while workers were expected to carry out assigned tasks without questioning.
The traditional organization followed a cause-and-effect approach with clearly defined incentives and objectives. This made it easier to control business processes as everything was predictable.
The conventional model of an organization is designed to establish managerial control, provide workers with job instructions, and enable managers to gather information for planning. Managers operate the organization through a hierarchical structure, authority, control, and rules. This traditional model can be compared to a well-built machine with distinct functional components that work reliably and efficiently to achieve predetermined goals.
On the contrary, the modern organization focuses on strategic management and considers the growth of decentralized structures. Motivation, creativity, as well as the influence of politics and power, compel organizations to undergo significant structural changes. In the modern organization, information flows in multiple directions, fostering communication between management and employees.
Compared to traditional organizations, modern organizations have more variables instead of defined objectives, resulting in more complex and diverse structures. In addition, modern organizations have fewer layers in their structure, leading to less complexity and specificity in their hierarchy. This poses challenges for management and department managers in controlling and regulating their departments, as the chain of command is not as clear as in traditional organizations. Furthermore, goals in modern organizations are influenced by various factors such as strategic planning, teamwork, creativity, and individual responsibility towards incentives. By clearly defining the organizational structure, managers are able to plan strategic maneuvers.
Companies that define their organizational structure and display their Organizational flow chart, job descriptions, and responsible authorities for each department can improve communication and working relationships among employees and management. This clear structure facilitates an understanding of duties, guidelines, responsibilities, hierarchy, and individual positions within the company. Such clarity helps both management and employees comprehend the organization and their roles within it. Issues arise when managers are unsure of their competences or what is expected of them in terms of their role and authority within the company. This lack of clarity significantly affects organizational productivity and needs to be addressed.
