Traditional Vs. Contemporary Organizational Structure

Traditional theories of organization prevailed during the Industrial Revolution.

Traditional organizations emphasize a strict division of labor, top-down decision-making, and extensive rules and procedures. As global economies emerge, organizations that implement more decentralized organizational structures are faster responders to market changes.

Traditional Organizational Structure

The traditional organization is a pyramid with a president at the top, a few vice presidents, layers of management and the majority of employees at the bottom. Jobs are specialized, and information and authority flow from higher to lower levels.

Weaknesses of Traditional Structure

A strict hierarchical organization hinders response to rapidly changing environments. It is slower to react to changes in market conditions, and less efficient in taking advantage of knowledge introduced from a variety of sources on the ground.

Contemporary Organizational Structure

Information and ideas flow in all directions in the contemporary organizational structure.

The contemporary design flattens the traditional pyramid structure, facilitates the flow of information to all parts of the organization and reduces response time to external and internal demands.

Types of Contemporary Organizational Structures

The matrix structure, the boundary-free organization and the learning organization decentralize decision-making power, and allow information and innovation to flow horizontally through a more interdependent organization.

Weaknesses in the Contemporary Structure

Turf wars are common problems in contemporary organizations.

In less hierarchical organizations, conflicts may break out related to uncertainty about roles, role conflict between managers and "turf wars." Organizations resolve these problems with training programs run by skilled organizational management trainers.

References

• Reference for Business: Matrix Management and Structure
• Reference for Business: Organizational Structure
• Flat World Knowledge: Contemporary Forms of Organizational Structures

Resources

• Infed: Peter Senge and the Learning Organization