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. A company has a very formal mechanistic structure, which has worked over the decades it has been in business. Recently, however, the business climate has changed and is more dynamic and uncertain. As a result, the company’s overall performance is suffering. What would you recommend that this company do to improve its organizational effectiveness?
Expert Answer
Mechanistic structures are highly formalised and centralized. Communication follows formal channels and employees have specific job description with delineated roles and responsibilities. Such organization structures are rigid and resist to change. This type of organization structure is not suitable for innovativeness and quick action. It inhibits entrepreneurial action and discourages individual initiative. Because this type of organization structure is limits individual autonomy and self determination, it leads to lower levels of intrinsic motivation for the job. Mechanistic structure is more suitable when the business climate is stable.
In a dynamic and uncertain business climate, such an organization structure tend to become ineffective, because of the inherent inflexibility. Therefore in a dynamic and uncertain business climate, organic structure is more effective, because of flexibility, decentralization and low levels of formalization. Communication is more flexible and fluid in organic structure. IT leads to higher levels of motivation and job satisfaction. It provides conducive environment for innovation and entrepreneurial behavior. Employees are more empowered with autonomy as well as accountability. As product division grows and product becomes profitable, a separate business is created. Overall organization effectiveness improves with organic structure.
Therefore in a dynamic and uncertain business climate, it is recommended to change the organization structure from mechanistic to Organic.
