The effect of Simple Organizational Structure on HR strategy and Its Practices

Part 2:

The Simple Structure is the simplest form of structural configuration with small managerial hierarchy and low degree of departmentalization. Key part of this structure is strategic apex with operating core at the base and an insignificant middle line, which defines that the flow of authority is top down, the decision making process is centralized and the span of control is wide. In Simple Structure, behavior is least regulated, jobs are least specialized, and there is hardly any use of pre-planned procedure to determine what to do, when and how to do it, how training will be shaped and how liaison will be maintained (Mintzberg, 1979, 1983). Woodward (1965 cited in Mintzberg, 1983) describes that this structure can be visible as a single-purpose firm with no formal planning, little staff, organic relationships and the tasks of which are coordinated by the chief executive.

The relevant environmental contingency for simple structure is simple and dynamic and this pattern fits the best to many small organizations, especially those of the formation stages (Segal-Horn, 1998). The nature of simple structure puts greater emphasis on direct supervision-the key coordinating mechanism through which coordination can be attained in the workplace where owner-manager will assume the job to manage the work of others. Another way, work in simple structure can be coordinated, is through mutual adjustment due to the small size and simplicity of the organization, which allow informal communication among employees and between employee and the owner (Mintzberg, 1979,1983). Despite the freedom of informal communication, all strategic decisions, including the formulation of human resource strategies lie in the hand of the owner-manager (Segal-Horn, 1998). If a fast food restaurant wants to pursue, for example,

a recruitment strategy that is to attract quality people (Armstrong, ed. 1992:70)

for its operation, there is a greater need that the manager must focus on the knowledge and expertise required to perform the task and is significant for effective resourcing, advertising and recruiting qualiy people (Buford, 2006).

In simple structure, the unspecialized nature of the jobs where employees do not require high skills to perform the functions and with ineffective and inconsistent reward policies, the scope of hiring competent people is quite difficult. The recruitment functions involve placing a ‘staff wanted’ sign or hiring people through word of mouth or through local advertisement. Similarly employees are trained on the job and hardly any training strategy is developed to enhance the skills of employees. Though there is one, it is for gaining short-term productivity and is narrowly applied (Begin, 1991).

It is pointed out that organizational configuration impacts greatly on the extent to which people in an organization is empowered to perform their tasks. So the extent to which employees are able to participate in simple structure is limited and depends on the discretion of the owner, which may discourage employees (Grand et al., 1994). A contrasting view is presented by Worthy (1950 cited in Grand et al., 1994) where it is argued that a simple structure can better understand human characteristics due to the high interactions among employees and with owner, which is meaningful for them to be motivated. It is, therefore, asserted that the human resources flow is quite simple and relaxed because the organizational procedures are determined by owner-manager through his/her intuition (Begin, 1991). Mintzberg (1987) labels the knowledge exercised here is not intellectual, not critical and decisions are made relying on own knowledge and understanding.



…. will be added in the last part of this article.



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