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Types of Organizational Structure



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    In 1997 McKesson Corporation sold PCS INC. to Eli Lilly Company. It was a time when all employees were unsure of what was in store. Were there going to be layoffs, major changes or status quo? As it turned out, there were few changes that impacted the day to day life of the employees. In 1998 PCS was once again sold to Rite Aid Corporation. We are about to embark on this activity again as Advance Paradigm has purchased us from Rite Aid Corporation. Once the sale is complete, we will become Advanced PCS. PCS employees are familiar with organizational change.

    What type of organizational structure will work? I have been asked this many times during my tenure at PCS. I will explain whether benefits or difficulties will arise from each type. I believe there are various types in use throughout PCS today. The focus of my paper will be in my department, Materials Management, Corporate Mail Services.

    An organizational network is a system of interconnected or cooperating individuals according to Gary Dessler in Management, Leading People and Organizations in the 21st Century. PCS utilizes both formal and informal networks throughout the organization. In my department an informal network exists between the small groups. There are three managers, one assistant vice president, a vice president and several analysts and buyers. Analysts and buyers interact when keeping the data of the system in sync. We don’t have any formal relationship to each other but are dependent on the expertise of each. Within the data group, there is a formal network made up of a manager and two analysts. Purchasing has a manager and several buyers. These two groups are very formal and structured. Problems are reported to the manager and passed up the line if necessary.

    Throughout PCS there is an electronic network. The company is spread out over four local campuses and nine regional offices. E-mail is the communication method of choice. The sales group is electronic and meets formally each quarter with the sales managers and directors. Even within my department, for documentation, e-mail is the communication method.

    Prior to working in Materials Management, the group I work with would be defined as team based and boundaryless. The person in charge wanted to build a self managed team that would function without boundaries. Our team, RECAP III, was made up of employees from each department in the company. Gary Dessler defines boundaryless as having fewer boundaries than traditional structural mechanisms.

    Standard operating procedures and process flows began to be created both for the core business and RECAP III as well. What PCS needed to do was to “build the organization around the new software and the software around the customer” (Executive Edge, 1996, p. 2). These changes were to be made to meet the needs of the customer, based on what they told us what they wanted.

    I have tried to bring this strategy to Materials Management. I began creating Standard Operating Procedures. For this department having been together only one year, there was little to no documentation. I have looked for ways to make the workflow easier and communication easier.

    “You must lay a proper groundwork, involving those who will be affected by the change and obtain commitment from the relevant stakeholders” (Pfeiffer & Company, 1993, p. 5).

    Also involved in Materials Management are employees in two mail order facilities who have been independent. The corporate group was taking back control of all data. People were being locked out of the system. Inquiry was the rule of the day. Standardization began and everyone as beginning to see this was for the best.

    PCS uses many different types of organizational structures yet we are lead by the traditional. The CEO passes the company plans, goals and strategy to all employees. The company also respects the voice of the employee. Every three years all employees complete an independent survey and then the results are passed back to us.

    I believe every company at one time or another uses all types of organizational structures. In many occupations I’ve had during my working life, I have been involved in each of them. My hope is to someday take the knowledge I’ve gained and use it wisely in an organization of my own.

    Dessler,Gary. (1998). Management: leading people and organizations in the 21st century.

    Harai, O., & Imarato, N. (1996). An Interview with Orin Harari and Nicholas

    Imparato, Authors of “Jumping the Curve” Creating a Great Organization [Online].


    Nolan, T., Goodstein, L. & Pfeiffer, J. (1993). Changing Organizations and People [Online].


    Types of Organizational Structure. (2018, Jun 23). Retrieved from

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