Advantages And Disadvantages Of Organizational Performance

Organization performance is measured by how effectively and efficiently managers use available resources to satisfy customers and achieve organizational goals (Jones and George,

2013).Not only does the organizational structure help achieve its goals, but also reflects the employees’ behavior, so utmost care must be taken while designing it. The features usually addressed while designing an organizational structure include: division into sections and units, number of levels, distribution and access to information, physical layout, type of people recruited and behaviors that are rewarded (Michael B. MeCaskey, 1974).

The different organizational structure that we have come across are the Functional Structure, the Divisional Structure and the Matrix Structure.

Matrix structure is also far from perfect.”Matrix organizations are relatively easy to understand but difficult to manage” (Atkinson, 2003). The major disadvantage in Matrix structure is the power struggles between the managers from the functional and the divisional levels. Buck-passing and other conflicts create problems in the matrix structure.

As a result, the managers are stuck in endless meetings resolving conflicts (Peters, 1979).

The employees in matrix organization are usually in a state of confusion because they are usually left hanging between two bosses. Matrix structure also increases management cost due to dual chain of command.

As we have seen above, all three structures have their own set of advantages and disadvantages.

A structure should be adapted only if it is feasible to the environment that the organization works in. A more stable product company may adopt Functional structure or

Divisional structure over the Matrix structure, whereas a new product development company with changing environment would adapt Matrix structure. With my experience of working in a software development firm, we adapted the Agile Methodology of