Resource Needs for an Organizational Structure

Whether the organizational structure returns profit or not, economic resources are still needed. Such resources range from necessary equipment and funding to human resources, but can usually be reduced to mechanical means of production and labor. The purpose of one organization differs from another and therefore the required economic materials vary.

The least complex organizational structure possible is the “Pre-Bureaucratic Structure”. Seeing as this type of business is based on the absence of standardization, what responsibilities fall on each employee is malleable, responsibilities which are often at the discretion of the leader. Since the person in charge of a small organization is enough to direct all the involved individuals and the need of hierarchies is minimal, this type of structure tends to consume fewer resources as opposed to divisional structures.

The latter type of organizational structure is divided into semi-independent units which are trusted to possess all required functions to perform the intended tasks and manage their own resources. In case of a change in market conditions, it is easier for such structures to respond seeing as they can request performing of multiple functions from units with an already designated assignment, which means making processes such as marketing and production be duplicated across units. They do, however, require more resources in comparison to functional structures.

With functional structures, attached resources and processes are separated by function to the organization. One business might have departments in human resources, accounting, production and marketing, for instance. It is this division of departments by role that makes such an organizational structure efficient, expertise-concentrating and benefit-reaping, because it rules out a number of rather pointless processes which would otherwise meaninglessly consume valuable resources.

Another type of organization is the “Matrix Structure”, a structure supporting two hierarchies, a function-based one and one focused towards dividing the overall organization into semi-independent organizations. Thus, each employed individual answers to two persons: the one in charge with the function-based aspect of his or her job and to the one responsible for the division the employee is part of. This type of structures allow organizations to greatly benefit from a concentrated expertise and flexible response to constantly changing market conditions by incurring costs of significant import brought about by redundant processes and management. While being a highly efficient combination of the functional and divisional structures, it is also extremely likely to consume more resources than either one of the two.