Understanding Organizational Structures and Power Dynamics
Concept of Organizations
Organizations have evolved from families and tribes to complex systems. Initially, nomadic groups formed, followed by permanent villages and tribal communities. Later, the feudal system and nations emerged.
Standings
1. Organizations Designed as Tools
This perspective describes organizations as instruments designed to achieve specific goals and objectives.
2. Organizations as Social Scenarios
This view sees organizations as places where individuals and groups interact and influence each other.
3. Organizations as Living Systems
This perspective considers organizations as adaptive entities that strive to survive and thrive in their environment.
Modern Organization
Modern organizations are a combination of the three standings mentioned above. They are characterized by:
- Management systems
- Objectives and results
- Internal formal structure
Organizational Trends
1. Flattening Hierarchies
Organizations are becoming less hierarchical, with fewer management levels and a greater emphasis on collaboration.
2. The Rise of Computer Technology
Computer technology is facilitating decentralization and improving information flow, enabling faster decision-making at lower levels.
3. Blurring Boundaries
Traditional organizational boundaries are becoming more fluid, with increased collaboration across departments and with external partners.
Structures and Functions as Sources of Power
Ability to Deal with Uncertainty
A function gains power when it can reduce uncertainty for other functions.
Centralization
Centralization refers to the degree to which a function or division is located at the center of resource transfers and dependencies.
Control over Resources
Sales can control production by demanding products that meet customer needs.
Irreplaceability
A function becomes powerful when it cannot be duplicated or replaced and is vital to the company’s strategy. For example, the technical department in a differentiation strategy.
Control over Contingencies
This refers to a function’s impact on the organization’s relationship with its environment, including opportunities and threats.
Control over Resource Generation
Power stems not only from the ability to distribute resources but also from the ability to generate them in the future.
The Power of Groups and Coalitions
To gain power, individuals and groups often form coalitions and alliances.
External Actors with Influence
Owners
Owners exert control through near-complete ownership.
Partners
Suppliers, customers, partners, or even competitors can influence the organization if there is a degree of dependency.
Employee Associations
Unions and professional associations can exert influence from outside the organization.
Public
External stakeholders who are not owners, employees, or suppliers can still influence the organization if they feel affected by its actions.
Internal Coalitions
Executive Director
The Executive Director is the most powerful agent within the organization. They are the trusted person of the Board and exercise referent power.
Middle Management
Middle managers have limited power within specific functions or areas. They often balance their identification with the Executive Director’s objectives with their own desire for autonomy.
Operators
Operators carry out the organization’s core work. They tend to identify less with the organization than managers but can still exert influence.
Technostructure Analysts
These individuals, such as planners, accountants, and systems analysts, advise the Directorate on formal control and adaptation. They have informal influence but no formal authority.
Support Staff
Support staff provide various services, from cafeteria to legal counsel. They can gain power through specialized skills and collaboration.