Traditional (Mechanistic) Organizational Design:
- Bureaucratic: Traditional organizations have a strict hierarchical structure with clear lines of authority and a top-down decision-making process. Decision-making authority is concentrated at the top levels of the organization.
- Rigid: Traditional organizations have a rigid structure and are resistant to change. They have established procedures and processes that are followed strictly, and any deviation from these processes is not encouraged.
- Relies heavily on function and division: Traditional organizations are organized according to functional departments or divisions. Each department handles a specific aspect of the organization's operations, such as finance, marketing, or production. Communication and coordination between departments are often limited.
Contemporary/ Modern (Organic) Organizational Design:
- Fluid/ flexible (adapts easier to environmental changes): Modern organizations are designed to be flexible and adaptable to changes in the environment. They have a flatter structure with fewer hierarchical levels. This allows for quicker decision-making and greater agility in responding to the rapidly changing business landscape.
- Fewer rules and procedures: Modern organizations have fewer rigid rules and procedures compared to traditional ones. There is more emphasis on autonomy and empowerment of employees. This allows for creativity, innovation, and flexibility in problem-solving and decision-making processes.
- Decentralized decision-making: Modern organizations decentralize decision-making power. Authority is distributed among lower-level employees and teams, enabling them to make decisions more autonomously. This not only speeds up the decision-making process but also fosters a sense of ownership and responsibility among employees.
Overall, modern organizational designs prioritize flexibility, adaptability, and decentralization of decision-making, while traditional designs emphasize stability, structure, and centralized control.
2.2. Owing to rapid changes in the environment (IT, globalisation, customer needs, etc.), modern
organisations need to be flexible in order to accommodate the changes.
2.2.1. Describe the characteristics of traditional and modern organisations designs.Using the following characteristics.
Traditional (Mechanistic)
– Bureaucratic
– Rigid
– Relies heavily on function and division
• Contemporary/ Modern (Organic)
– Fluid/ flexible (adapts easier to environmental changes)
– Fewer rules and procedures
– Decentralised decision-making
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