The History of Organizational Structure

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Organizations shape the world.
Organizations shape the world. (Image: Ryan McVay/Photodisc/Getty Images)

The history of organizational structure can be used to explain a large part of the world that you live in today. Organizations make up much of the social reality that people deal with in their day-to-day lives. From governments to business organizations, these structures shape and transform the activities of individuals of all standing throughout the world. Understanding the history of organizations means understanding the history and evolution of human civilization.

Centralization

For a very long time, the history of organizations was largely the history of ever greater centralization and control. This change seemed to take on an even greater significance after the Industrial Revolution, which swept the world in the 19th and early 20th centuries. Large business organizations came to control the world's economy, leveraging tremendous amounts of capital to finance large commercial undertakings. Governments responded in kind with large centralized regulatory bodies and social welfare programs.

Decentralization

Gradually, following World War II, a new kind of structural evolution seemed to gain sway over organizations. Decentralization, where the decision-making process is delegated to smaller autonomous units instead of a great central control, became the model. Smaller organizations came to posses an advantage over large organizations in the post-industrial economy, as they were quicker to react to change and dynamism. Governments responded in kind, delegating more control to local authorities in new federalism.

Globalism

As technology has improved, organizations have tended to become more global in nature. Both revolutions in transportation technology and communications technology have made this possible. It is commonplace for even a small business organization to employ workers from around the world. As well, government organizations have become more global in nature, cooperating with one another through world bodies such as the United Nations and the International Monetary Fund.

Laws

As they have evolved, organizations have tended to place upon themselves, or have placed upon them, ever greater restrictions meant to prevent abuse. Most governments in the world at least claim to operate according to a constitution that restricts their powers and gives their citizens certain rights. As well, businesses are restricted by the laws of various countries dictating definite organizational forms, such as the corporation with its board of directors.

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