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Organizational structure and performance share a relationship in which the former can dictate or at least affect productivity. Different structures might be more appropriate for businesses based on the size of an entity or the industry in which a company operates. Employees often become a product of the organizational structure practiced at a business and begin to behave and operate in a manner that reflects and ideally supports the framework implemented by employers.
Understaffed companies might require that individuals wear many hats, that is, perform multiple tasks that are associated and nonassociated with a job title. It may be in order that a business continues to operate as though it were fully staffed even though it is not. This is not the case in a company that has a functional organizational structure.
A functional environment is one where individual employees are given specific tasks under the umbrella of a division with a broader organizational purpose. These individuals are expected to perform in line with defined parameters. While there may always be a plausibility for crossover between divisions as projects emerge and individuals miss work, the roles and job functions remain segregated and defined. The link between organizational structure and performance here is that employees are likely to become increasingly proficient at their work because of the clarity and repetition assigned to tasks. Also, individuals may have little recourse if productivity is lagging because the goals are clear as implemented by the employer.
A small company is more prone to adopt a flat organizational structure. This is in part due to practicality as this type of environment is shaped by a somewhat limited staff. Employees often work under the direct leadership of the owner or operator of the company in contrast to being managed by departmental or middle-management executives. In this setting, organizational structure and performance are linked because employees are aware that upper management is cognizant of individual performance. This could affect productivity in a positive way and inspire participation among coworkers.
In a matrix organizational structure, there is less formality to the roles attached to job titles. Companies that create this environment are likely to promote teamwork and the blending of different office divisions for a purpose. Organizational structure and performance are linked in this setting as employees are encouraged or rewarded for demonstrating an entrepreneurial spirit and creativity as they work with one another to complete a certain goal. Conflict could arise in team environments if employees resist different management styles of individuals from outside departments.