Optimal Structure for Managing NGOs

Burns and Stalker conducted a comprehensive research on the effect of external environment on a pattern of the administrative and economic activity of 20 British and Scottish companies. The study showed that whenever the environment is stable, a mechanistic structure is highly recommended because it is easy to predict tasks and activities. However, by the time the environment becomes more uncertain, it becomes urgent to have a structure with no hierarchy, decisions to be made through people with more expertise or leadership skills in a decentralized manner. Meanwhile, effective structures are those that effectively respond to changing conditions. Scheffel, Cunha and Lima in the study of a contingency plan to technology-based companies applying a mechanistic structure, clarified that the organic structure emerged as an optimal assumption to structural change that allows these companies to adapt to their environment, and follow the evolution of technology and pace of innovation. Morgan in his turn argued that organic structures are more effective in companies whose strategies require innovation and flexible arrangements. Zanzi argued that the mechanistic structure can be effective when the firms seek efficiency and standardization of business tasks. In an article published by Sophie Johnson, reference was made to new businesses as typically having few rules and less defined roles providing a space for more flexible and adoptable situations. Such situations are called organic. As organizations grow in size, new rules and regulations are needed in order to govern the business's increasing operations. The formation of such new rules and roles makes the structure more mechanistic. The most mechanistic structure is the functional structure characterized by such rigid hierarchy and it is the first formal structure adopted by small companies. In such a stage of the organizational life cycle, there are many management layers exerting control, however when such bureaucracy becomes an impediment, businesses should switch to more organic form granting more control to employees. In this respect, the organizational life cycle plays a major role in depicting structural changes. During the introduction phase, the organizations tend to be more organic with few rules and formal procedures. As the organizations move towards the growth stage, the organizations start to adopt more formal rules and procedures rendering the structure more mechanistic. Changes in the business environment may make the existing structure inappropriate to respond competitively to market needs, for example in responding to a competitive new market entry, the mechanistic structures aren't so light to avoid the threats as less bureaucratic companies can do. Furthermore, major strategic changes may render the adopted structure inappropriate, especially when the organizations seek cost leadership in a structure that does not support efficiency and the same applies for those that aim for innovation and creativity in such rigid mechanistic form.