UNDERSTANDING STRUCTURE, CULTURE AND VALUES BUSINESS AND MANAGEMENT
In today’s business world, marked with high levels of competition for customers’ attention, companies work hard on differentiating themselves by having distinct organizational culture and values. Organizational structure, culture, and values serve as integral elements of what defines an organization and sets it apart. Values serve as a foundation for a company’s formation, its strategy defines the organizational structure, and the organizational culture connects the values and the structure. Organizational structure, culture, and values can be seen as the body, the personality, and the soul of an organization.
As organs are arranged in a specific order to form a body, or parts of a car each have their exact place to ensure the proper functioning of the vehicle, the way an organization is structured is an important part of what it is and what it does. Without any structure, there would be chaos and no goals could be accomplished. Two significant types of organizational structure are formal and informal.
Formal Organizational Structure
Formal organizational structure is a result of mindful work of the company’s creators. It is a design that allows the company to function and achieve its goals. Meyer and Rowan define formal organizations as “systems of coordinated and controlled activities” (Meyer & Rowan 340) and compare formal structure to a blueprint for activities that includes the table of organization, along with a listing of its offices and departments, positions and programs (Meyer & Rowan 342). There are specific reasons for each component of the structure, and the structure as a whole represents a theory of how activities should happen. Conventional theories state that the development of formal organizational structure arose from a need to control and coordinate complex activities in an efficient way. Weber explains that the historical emergence of highly structured organizations was a consequence of economic markets that place importance on rationality, while becoming more and more complex, growing in size, use of technology, division of labor, and internal relations (Weber 36). Meyer and Rowan, however, argue that the mere existence of the gap between formal and informal structure suggests that practice is different from theory, therefore, the formal structure does not achieve its main purpose of control and coordination. Instead, formal structure can be bureaucratic and inefficient. Meyer and Rowan argue that elements of formal structure, such as positions, policies, procedures, and programs, are merely reflections of institutionalized rules (Meyer & Rowan 343). In other words, they exist not because they make the job easier, but because they should exist according to the public opinion, laws, and views of important constituents. Chandler defines organizational structure as the design that allows to administer the corporate strategy (Chandler 26). He uses the examples of Du Pont, General Motors, Standard Oil, and Sears to explain how organizations evolve and are restructured because they follow the expansion mode of corporate strategy. Hall and Saias, on the other hand, point out that it is the organizational structure that later influences organizational …