THE SIMPLE STRUCTURE

Presented by J. B. Nangpuhan II (MPA Student) for the class (Organizational Design) of Dr. S. K. Kim at Chonnam National University, South Korea. 2010

 

SUMMARY

 

KEY TERMS:

·         structure – 구조

·         centralization – 집권화

 

INTRODUCTION

The configuration of basic structural characteristics in any kind of organization can be found below: 

Prime Coordinating Mechanism:	Direct Supervision
Key Part of Organization:	Strategic Apex
Main Design Parameters:	Centralization, Organic Structure
Situational Factors:	Young, Small; nonsophisticated technical system; simple, dynamic environment; possible extreme hostility or strong power needs of top manager; not fashionable

I.        DESCRIPTION OF THE BASIC STRUCTURE

·         Simple Structure has little or no technostructure, few support staffers, a loose division of labor, minimal differentiation among its units, and a small managerial hierarchy.

·         Little of it is normalized, and it makes minimal use of planning, training, and the liaison devices. It is, above all, organic.

·         Coordination is effected largely by direct supervision – power over all important decisions tends to be centralized in the hands of the chief executive officer.

·         The key part of the structure is the strategic apex. The structure consists of little more than a one-person strategic apex and an organic operating core.

·         Grouping into units is often on a loose functional basis, with coordination between units left to the chief executive.

·         Communication flows informally in this structure, most of it between the chief executive and everyone else.

·         The workflow tends to be flexible, with the jobs of the operating core being relatively unspecialized and interchangeable.

·         Decision making is also flexible, with the centralization of power allowing for rapid response.

·         Strategy formulation is on the chief executive – the process is intuitive and nonanalytical, often thriving on uncertainty and oriented to the aggressive search for opportunities. It reflects the chief executive’s implicit vision of the place of the environment and an extension of his own personality.

·         A symbolic representation of the Simple Structure is shown in Figure 8-1 on page 159 of our reference book.

 

II.      CONDITIONS OF THE SIMPLE STRUCTURE

·         The environment of the Simple Structure tends to be one and the same time simple and dynamic. Simple environment is suitable for a single individual and can control decision making. Dynamic environment means an organic structure because its future state cannot be predicted.

·         The technical system is both nonsophisticated and nonregulating.  Sophisticated ones require elaborate staff support structures, to which power over technical decisions must be delegated. Regulated ones call for bureaucratization of the operating core.

·         In terms of stage of development, most organizations pass through the simple structure in their formative years. This is because it relies on leadership to things done.

·         Many small organizations remain with the simple structure even beyond its formative years.

·         During extreme hostile situations, the organization is forced to centralize no matter what its usual structure is. This will lead to the formation of the crisis organization. James D. Thompson called this phenomenon as synthetic organization – a temporary set up to deal with extremely hostile situations with emphasis on leadership.

·         Personal needs for power produce another variant, which we call the autocratic organization. The chief executive hoards power and avoids formalization of behavior as an infringement on his right to rule by fiat so he designs a simple structure for his organization. The forces of autocracy or charisma can drive even very large organizations of developed societies toward the simple structure, as in the Ford Motor Company in the late years of its founder.

·         Another factor that drives an organization to simple structure is owner management which leads to entrepreneurial firm. The entrepreneurial firm seems to be the best overall illustration of the simple structure, combining almost all of its characteristics – both structural and situational – into a tight gestalt. The classic entrepreneurial firm is aggressive and innovative, continually searching for the risky environments where the bureaucracies fear to tread. It seeks out environments that are both dynamic and simple. Their unpredictable maneuvering keeps their structures lean, flexible, and organic.

 

III.    SOME ISSUES ASSOCIATED WITH SIMPLE STRUCTURE

Centralization has the important advantage of ensuring that strategic response reflects full knowledge of the operating core. It also favors flexibility and adaptability in strategic response: only one person need act. However, there are issues giving negative impacts to the simple structure:

1.       Centralization can also cause confusion between strategic and operating issues. The chief executive can get so enmeshed in operating problems losing sight of operating considerations; or if not, he may become so enthusiastic about strategic opportunities but lack of attention goes to the routine operations. Both problems occur frequently in entrepreneurial firms.

2.       The simple structure is also the riskiest of the configurations, hinging on the health and whims of one individual. One heart attack can literally wipe out the organization’s prime coordinating mechanism.

 

Despite the negative impact of simple structure, below are the advantages vis-à-vis disadvantages:

1.       Its flexibility is well suited to simple and dynamic environments, to extremely hostile organizations (at least for a time), and to young and small organizations. But lacking a developed administration, it becomes a liability outside its narrow range of conditions.

2.       Another is its sense of mission. Many people enjoy working in small, intimate organization, where its leader – often charismatic – knows where he is taking it. But other people perceive the simple structure as highly restrictive. Because one person calls all the shots, they feel not like the participants on an exciting journey.

 

CONCLUSION

Simple Structure is being described in this chapter as the property of one individual, whether in fact or in effect. There are no countervailing powers in this configuration, which means that the chief executive can easily abuse his authority.

Today, many view Simple Structure as an anachronism in societies that call themselves democratic. Yet it remains a prevalent and important configuration and will continue to be so as long as new organizations are created. Some prefer to be small and informal while others require strong leadership despite larger size, society prizes entrepreneurship, and many organizations face temporary environments that are extremely hostile or more permanent ones that are both simple and dynamic.

 

Reference: Mintzberg, H. (1993). Structure in Fives: Designing Effective Organizations. Upper Saddle River, NJ: Prentice-Hall, Inc. 157-162