Traditional organisations emphasise a strict division of labour, top-down decision-making, and extensive rules and procedures. As global economies emerge, organisations that implement more decentralised organizational structures are faster responders to market changes.
Traditional Organizational Structure
The traditional organisation 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 specialised, and information and authority flow from higher to lower levels.
Weaknesses of Traditional Structure
A strict hierarchical organisation 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
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The contemporary design flattens the traditional pyramid structure, facilitates the flow of information to all parts of the organisation and reduces response time to external and internal demands.
Types of Contemporary Organizational Structures
The matrix structure, the boundary-free organisation and the learning organisation decentralise decision-making power, and allow information and innovation to flow horizontally through a more interdependent organisation.
Weaknesses in the Contemporary Structure
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In less hierarchical organisations, 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.