The mechanistic way of organizing the business essay (2023)

The structure of an organization has a significant impact on employee behavior and performance. Organizational structure as a determinant of organizational performance: uncovering essential aspects of organic and mechanistic structure. On the other hand, the organizational structure provides an overview of the hierarchy of levels, roles and responsibilities, authorities, communication channels, etc. A mechanistic organizational structure has a number of bureaucratic features, e.g. do, have clearly defined professional roles and clearly defined communication channels. These features ensure high performance in demanding processes and procedures. In addition, it reduces flexibility and learning opportunities. The success of the mechanistic structure largely depends on the external environment as well as its effectiveness in increasing the efficiency of the organization.

Understanding the definition of organizational structure is extremely important as it affects both employee behavior and organizational performance (Organizational Structure as a Determinant of Organizational Performance: Uncovering the Basic Aspects of Organic and Mechanistic Structure). Organizational structure is a method that consists of the responsibilities and powers delegated to members and the way work is conducted among them. (Nahm et al., 2003). This also includes hierarchical levels, the centralization of power and horizontal integration. However, organizational structure is a multi-dimensional construct that illustrates division of labor (roles or responsibilities, including specification), departmental structuring, centralization, complexity, communication or coordination mechanisms, including standardization, formalization, and flexibility (How does organizational structure affect performance? by Learning and Innovation in Austria and China). Two main types of organizational structures can be distinguished: mechanistic and organic. The next section provides an overview of the mechanistic organizational structure while discussing its nature and features.

The mechanistic structure is inherently hierarchical and bureaucratic. Its structure, processes and roles are viewed as a machine in which each part of the organization does what it is designed to do. Three main characteristics can be distinguished. Namely, a highly centralized authority, formalized procedures and practices, and specialized functions (Businessdictionary.com). The mechanistic structure thus has a clear, well-defined, centralized, vertical hierarchy of command, authority, and control. Efficiency and predictability are achieved through specialization, standardization, and formalization. Fixed tasks, technologies and processes are the result of such a mechanical organizational structure. The mechanistic structure aims to achieve efficiency through tight control (Enotes/Studymaster).

The features of the mechanistic organizational structure are listed below:

stable environment

This organizational structure works best when the environment is relatively stable.

Low task differentiation

The tasks will not be very varied, as each sub-task is relatively stable and easy to complete.

Low level of integration, e.g. departments and functional areas

Due to the task stability, the integration of departments and functional areas will be low, since tasks remain relatively stable and functional areas are not highly interdependent.

Centralized Decision Making

When the environment is stable, there is no need to make complicated decisions involving people at lower levels. Therefore, decision-making is centralized at the top of the organization.

Standardization and formalization

When tasks are stable, they should be standardized and formalized to allow operations to run smoothly and without disruption.

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Mechanistic organizations prefer a formalized structure for two main reasons. It reduces organizational volatility and increases its predictability rather than ambiguity (Mintzberg, 1979). The highly formalized mechanistic structure requires almost all processes and procedures to be administratively approved. On the other hand, it considers processes and procedures that go beyond these approved protocols as deviations to be controlled, which means that decision-making in all transactions should be based on established procedures, rules, regulations or instructions (enotes/study manager).

The mechanistic structure allows for more predictable employee behavior while increasing standardization in the organization. For example, an employee is familiar with processing customer returns or accepting credit card payments. Formalization enables organizations to improve their performance (Hahn, 2007). On the other hand, it also limits the possibilities for innovation and new ideas, since variations are neither allowed nor encouraged. As a result, the mechanistic structure does not support and quickly adapt to changes in the external environment. Therefore, the mechanistic type of organizational structure is best suited for large organizations operating in more stable environments, where it helps maximize organizational efficiency while minimizing costs through formalization and centralized decision-making (Carpenter et al., 1969). Classic management theories regard the organization as a "machine" (Fayol, 1949; Taylor, 1911). Classical theories emphasize the need for bureaucracy in organization, resulting in a lack of room for creativity and innovation. Classic management theories therefore promote a mechanistic organizational structure (Organizational Structure as a Determinant of Organizational Performance: Discovering Essential Aspects of Organic and Mechanistic Structure).

However, organizations operating in a rapidly changing environment require frequent changes in their processes and procedures, as well as changes in the external environment. In addition, measures appropriate to the situation are required to increase the ability to adapt to the environment. The formula and authority of mechanistic structures, therefore, do not encourage deviation from specific processes and procedures. Therefore, the mechanistic type of organizational structure is not effective for organizations operating in a dynamic environment.

Mechanistic organizations are shown to increase efficiency when tasks and technologies are relatively stable. This means that stable environments and technologies allow for clear definition and differentiation of work. The scientific method should be used to separate work processes in order to define precise tasks, assign tasks to workers, and monitor their performance (Fayol, 1949; Taylor, 1911). The professional activities in a mechanistic organization are divided into specific tasks. A specialized position is created by the assignment of one or more specific tasks that require a well-defined set of skills, methods and work processes. In addition, each professional function is assigned specific tasks or powers. Supervisors and subordinates are expected to strictly carry out assigned tasks according to strict procedures, while only a few senior managers monitor their performance. (Organizational structure as a determinant of organizational performance: uncovering fundamental aspects of organic and mechanistic structure). Managers act as planners and supervisors in a mechanistic organization. This results in high efficiency with clear instructions on how to perform specific tasks. On the other hand, it offers fewer opportunities for innovation. Therefore, innovation is limited to achieving efficiency in processes. However, it may make more sense to improve performance in a stable environment than to rely on innovative ideas. For example: “For example, few customers would wish for a McDonald's employee to show creativity when preparing a hamburger. Instead, when the worker follows established procedures and customers can have confidence that every hamburger they buy will taste the same, the repeatability and stability of the process required to make a hamburger is more efficient” (Enotes/Study Master).

In contrast, the rapidly changing outdoor environment requires innovative ideas to meet the needs of the outdoor environment. In addition, greater flexibility of operations and processes is required to meet the demands of the external environment. Employees would be given more flexibility in dealing with customers, which would mean that lower-level employees would have some leeway to make specific decisions to address the situation and resolve issues. Therefore, the mechanistic structure is less effective for organizations working under difficult conditions.

The centralized decision-making in mechanistic organizations allows a small number of executives to be actively involved in decision-making. Clear communication channels allow formal communication or information flow from top to bottom or vice versa. "Classical theorists" hold that centralized decision-making increases organizational efficiency and definitely leads to better organizational performance" (Gulick and Urwick, 1937; Weber, 1947). Classical theorists focused more on hierarchical power and paid less or no attention to the level of employee participation in decision-making. Employee participation in decision-making is an absolutely vital aspect of any organizational structure and directly impacts organizational performance (Carter & Cullen, 1984; Khakani et al., 2012). In addition, centralized decision-making leads to more efficient functioning of all bureaucratic structures (Goodsell, 1985). The scientific management of organizations is only possible when decision-making is limited to a few employees (senior management) in the organization, as in Taylor's (1911) concept (Mansoor, Aslam (2012).

However, centralized decision-making is better suited to stable and large organizations. Therefore, in highly dynamic external environments, organizations must act quickly to survive in the environment in which they operate. Therefore, some decision-making authority is required to decentralize and empower employees at lower levels. This helps them respond to rapid changes in the external environment. It is clear that a mechanistic type of structure will not adequately support organizations in performing in challenging external environments. Therefore, the degree of formalization in an organization depends on the technology, size and tradition of the organization (Robbins 1990, Burton and Obel, 1998 (Mansoor, Aslam (2012)).

In a mechanistic structure, a clear distance between employees and management reduces the ability of subordinates to bring new ideas. Furthermore, according to Douglas McGregor's Theory X, those who bring about change are relatable. Therefore, resistance to change is high and innovation is not encouraged as much in organizations with a mechanistic organizational hierarchy. (Armstrong, 2008). But in today's demanding and dynamic external environment, companies face intense competition. Therefore, organizations with a mechanistic structure face various difficulties in implementing rapid changes due to the highly formalized nature of the hierarchy itself. However, learning is a key factor in the development of an organization. The diagram below shows the steps involved in learning in a loop.

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Mechanistic organizations can use this model to improve the efficiency of their processes. The single-loop model focuses on analyzing actions and feedback to identify the gap between where we are and where we should be. Therefore, changes are introduced as actions rather than control variables (creating an advantage). Kolb's (1984) classic interpretation of learning succinctly describes the process of "one-loop learning" and is considered a simplified version of the scientific method (Kolb 1984, Armstrong 2008).

As discussed above, learning and implementing change requires flexibility within systems and processes. The rigid structure of mechanistic organizations does not facilitate the comfortable implementation of change. A clearly defined structure requires approval of all changes and formal communication within the organization. Significant effort and time is required in mechanistic structures to communicate and formalize all necessary changes, and the dynamic external environment requires rapid changes. Therefore, companies face various challenges in adapting to the external environment. In addition, implementing the change requires changing tasks or roles, which employees object to because their knowledge is more specific to the task or task complex. On the other hand, the change may require training and significant adaptation time, affecting the efficiency of the processes. In addition, the bureaucracy of mechanistic structures makes it difficult to implement change. Overall, this limits the ability for lower-level employees to participate in decisions about change. The pronounced distance between the hierarchy levels of the organization and the lines of communication reduces awareness of such changes. Therefore, employees are afraid of change and resist innovations.

When deciding on the level of formalization and specialization in the mechanistic structure, it is extremely important to consider the pace of change in technology and the external environment. When all these factors are taken into account, one can conclude that the mechanistic structure leaves less room for rapid changes. Therefore, it is better suited for large organizations operating in relatively stable environments. Furthermore, the type of organizational structure cannot be precisely defined as good or bad as it depends on the internal and external environment of the company. An organizational structure that is appropriate for one industry will inevitably be appropriate for another industry due to many external factors such as competition and the influence of technology.

The mechanistic structure is inherently highly formalized and specialized with well-defined procedures, processes, and roles. Centralized decision-making is one of the key features of a mechanistic structure. Managers are involved in decision-making while their subordinates are expected to perform one or more specific tasks within the department. Therefore, the mechanistic structure offers fewer opportunities for learning. However, the flexibility of the structure is decisive for learning support. When dealing with a changing and dynamic environment, learning and innovation are imperative. The mechanistic structure does not provide enough flexibility to change or modify decision-making depending on the situation. Therefore, for an organization operating in a more stable environment, a mechanistic structure is extremely effective. These features of mechanistic structures reduce learning opportunities. Changing the level of mechanistic functions will help the company to some extent to increase learning opportunities.