Organizations are like the air we breathe – all around us but we hardly noticeable. Consequently, we don’t give either much thought. But we should! Whether our workplace, a community group to which we belong, our church group, the neighbourhood in which we live, or even our family, the organizations in which we are involved play a huge part of our lives.
So what exactly IS an organization?
Organizations are defined as a collection of individuals who interact and coordinate actions to achieve some sort of organizational objective. So simply put, there are people, some sort of structure and although not explicitly stated, an objective of sorts.
As an organization design guy, its the second element – structure – that I find particularly interesting. Structure speaks to the ‘interact and coordinate actions’ part of the definition. It helps us understand how the organization functions – how the people connect with each other. By definition all organizations MUST have structure. Without structure there is chaos.
So what is organizational structure? And how is it achieved?
For structure to exist there must be both individual responsibilities and organizational accountability. Responsibility and accountability – two sides to the organizational structure coin. Each organizational member must have some duty or task for which they are responsible AND some clearly defined accountability to another or others in the organization. Both are required for structure to exist.
So for structure to exist, individuals must be held accountable by the organization. Again, without structure there is chaos. How?
There are really only two options. Either someone has legitimate authority over an individual and therefore has power to hold an individual accountable for their actions/responsibilities or organizational members are working together and so, equally accountable to each other. Power is either unequal or equal – there is no other option.
Organization design teaches us that structure can only be achieved in two ways. By understanding how organizational members are held accountable for their responsibilities we can determine whether that organization is based on a state of control or the bureaucratic organizational model or a state of collaboration where individuals work together towards some common objective.