The structure of any organization has a clear impact on both employee behavior and its performance. On the other hand, an organizational structure provides an overview about the hierarchy of levels, roles and responsibilities, authorities, communication channels, etc. It is of utmost importance to understand the definition of the organizational structure since it affects both employee behavior and organizational performance. Organizational structure is understood as a method consisting of responsibilities and power allocated amongst members and how work procedures are carried out among them. It also includes the layers of hierarchy, centralization of authority, and horizontal integration. However, an organizational structure is a multi-dimensional construct which illustrates the division of work (roles or responsibilities including specification), departmentalization, centralization, complexity, communication or coordination mechanisms including standardization, formalization and flexibility. An important type of organizational structure can be identified as mechanistic organizational structure.
Mechanistic organizational structure is hierarchical and bureaucratic by nature. It’s structure, processes and roles are considered as a machine where each part of the organization does what it is intended to do. Three main features could be identified. Namely highly centralized authority, formalized procedures and practices & specialized functions. Thus, a mechanistic organizational structure has a clear, well-defined, centralized, vertical hierarchy of command, authority, and control. It achieves efficiency and predictability through specialization, standardization, and formalization. Rigidly defined jobs, technologies, and processes are outcomes of such mechanical organizational structure. Mechanistic structure aims to achieve efficiency thorough tight control.
Characteristics for mechanistic organizational structure are listed below:
- Stable environment: This organizational structure works best when the environment is relatively stable.
- Low differentiation of tasks: Tasks will not be differentiated much, because each subtask is relatively stable and easy to control.
- Low integration of e.g. departments and functional areas: Due to the stability of tasks, there will be low integration between departments and functional areas, because tasks stay relatively stable, and because the functional areas are not heavily dependent on each other.
- Centralized decision-making: When the environment is stable, there is no need for complex decision-making that involves people at lower levels. Therefore, decision-making is centralized at the top of the organization.
- Standardization and formalization: When tasks are stable, tasks should be standardized and formalized, so that operations can run smoothly without breakdowns.
Mechanistic organizations prefer formalized structure due to two main reasons. It reduces the variability within the organization and enhances predictability in the organization rather than being ambiguous. A highly formalized mechanistic structure demands nearly all processes and procedures to be administratively authorized. On the other hand, it considers processes and procedures outside to those authorized protocols as variances which should be brought under control meaning that decision making in all dealings should be done by applying such provided procedures, policies, rules or instructions.
A mechanistic organizational structure enables employee behavior more predictable while enhancing standardization within the organization. For example, an employee is well aware of handling customer sales returns or accepting credit card payments. Formalization enables organizations to improve performance. In contrast, it also curbs any opportunities for innovation and fresh ideas, since variations are not allowed or encouraged. Consequently, a mechanistic structure does not support or adapt quickly to changes in the external environment. Hence a mechanistic type of organizational structure is best suited for large organizations which operate in more stable environments where it helps to maximize the organizational efficiency while minimizing the cost through formalization and centralized decision making. Classical management theories perceive an organization as a ‘machine’. Classical theories emphasis the need for bureaucracy within organizations resulting the lack of space towards creativity and innovativeness. Thus, Classical management theories encourage a mechanistic type of an organizational structure.
However, organizations that operate in a rapidly changing environment requires to frequently change their processes and procedures with the changes that take place in the external environment. Moreover, it requires taking action according to the situation in order to enhance adaptability to environment. Thus, formulation and authority which exist in mechanistic structures does not encourage deviating from defined processes and procedures. Therefore, mechanistic kind of organizational structure is not effective for organizations that operate in a dynamic environment.
It can be seen, that mechanistic organizations increase efficiency when tasks and technologies are relatively stable. Meaning that stable environments and technology allow work to be clearly defined and differentiated. A scientific method should be used to separate work process to identify precise tasks, assign tasks in order to employees and monitor employee performance. Work activity of a mechanistic organization is separated into specific tasks. A specialized job position is created by assigning one or more specific tasks which requires rigidly defined set of skills, methodology and procedure to perform jobs. Furthermore, specific responsibilities or authority is assigned to each job function. Line managers and lower-level staff are to strictly perform assigned tasks according to strict procedures whereas few higher level managers monitor their performance. Managers perform as planners and monitors in a mechanistic type of organization. This leads to high levels of efficiency by clear instructions to perform specific tasks. On the other hand, it provides fewer opportunities for innovation. Thus, innovation is restricted to achieve efficiency in the processes. However, this can be more suitable to improve efficiency in a stable environment rather than depending on innovative ideas.
In contrast, a rapidly changing external environment requires innovative ideas to face external environment demand. Furthermore, it requires more flexibility in procedures and processes to meet demands from the external environment. Employees would be given more flexibility to deal with their customers meaning that lower level employees would have a certain amount of liberty to make certain decisions in order to face the situation and solve problems. Thus, the mechanistic structure is less effective for organizations that operate in challenging environments.
Centralized decision making in mechanistic type organizations enable few higher management personnel to actively be involved in decision making. Clear communication channels allow formal communication or information flows from top to bottom or vice versa. ‘Classical theorists’ provides a view point that centralized decision making increases organizational efficiency and definitely results in better organizational performance. Classical theorist’s focus was more on hierarchical authority and pays less or no attention to the degree of employee participation in decision making. Employee involvement in decision making is definitely an important aspect of any organizational structure and which directly influence organizational performance. Furthermore, centralized decision-making leads to the effective and efficient functioning of any bureaucratic structures. Scientific management of organizations is possible only if decision-making is restricted to few employees (upper level management) within organizations.
However, centralized decision making is more suited for stable and large organizations. Thus, in highly dynamic external environments, organizations require to act fast in order to survive within the in environment in which it operates. Therefore, certain amount of decision making power is required to decentralize and empower lower level employees. This helps them to react to quick changes that occur in the external environment. It is evident that the mechanistic type of structure would not sufficiently support organizations up to expectations when they are engaged within challenging external environments. Therefore, the extent to which formalization exists within an organization depends on the technology, size and the organizations’ traditions.
In a mechanistic organizational structure, the clear distance between employees and management provide fewer opportunities to bring in new ideas by subordinates. Moreover, those who bring change can be threaded according to the X theory of Douglas McGregor. Therefore, resistance to change is high and innovation is not so much encouraged in organizations having a mechanistic type of organization hierarchy. However, organizations face immense competition in today’s challenging and dynamic external environment. Therefore, organizations with mechanistic structure face various difficulties when introducing quick changes due to the highly formalized nature of the hierarchy itself. However, learning is a critical factor that affects organizational development.
Learning and implementing change requires flexibility within systems and procedures. The rigid structure in mechanistic organizations does not facilitate comfortable implementation of changes. A well-defined structure demands authorization of all changes and formal communication within organizations. In mechanistic type of structures communicating and formalizing all necessary changes takes a considerable effort and time where dynamic external environment demands quick changes. Therefore, companies face various challenges in adjusting to the external environment. Furthermore, implementation of change requires modifying tasks or roles where employees resist since their knowledge is more specific to a task or set of tasks. On the other hand, change may require training needs and considerable time to adapt which intern has an impact on efficiency of processes. Moreover, the amount of bureaucracy seen in mechanistic structures makes it difficult to introduce change. In conjunction, it reduces participation opportunities for employees in lower levels when deciding on changes. Clear distance between hierarchical levels of the organization and communication lines reduces awareness about such changes. Therefore, employees fear change and resist to innovation.
It is of utmost importance to consider the rate of changes in technology and the external environment while deciding on the amount of formalization and specialization used within the mechanistic structure. Considering all these factors it can be decided that a mechanistic structure provides less space for rapid changes. Therefore, it is more suitable for large organizations operating in comparatively stable environments. Moreover, the type of organizational structure cannot be precisely identified as good or bad since it depends on the firm’s internal and external environments. An organization structure that suits a specific industry will necessarily be suited for another industry owing to many external factors such as competition and technological impacts.
A mechanistic organizational structure by nature is highly formalized and specialized with well defined procedures, processes and roles. Centralized decision making is one of the main features in a mechanistic structure. Higher level managers are involved in decision making whereas their subordinates are expected to carry out specific task or tasks within the department. Therefore, the mechanistic structure provides fewer opportunities for learning. However, the flexibility in the structure is a key to promote learning. Learning and innovation is highly required when dealing with changing and dynamic environments. Mechanistic organizational structure does not provide enough flexibility to change or modify decision making according to situations. Therefore, a mechanistic type of structure is highly efficient for an organization which operates in a more stable environment. These features of mechanistic structures reduce opportunities for learning. Altering the level of mechanistic characteristics will help a firm to increase learning opportunities to some extent.