Summary
Contents
Subject index
The Handbook of Human Resource Management Education, the first handbook written on HRM education in the United States, clears up the confusion about the nature, content, and source of human resource management expertise. Stressing the importance of effective educational requirements to prepare students to work as professionals in the HRM function of organizations, this Handbook takes a giant leap forward in advancing the reputation and esteem of the HRM field. Taking a three-tiered approach, the chapters in this Handbook are written by top HRM educators and include thought-provoking pieces, empirical research results, and suggested teaching methods.
Fundamentals of Organizing: Structural Design and Its Implications for HRM Practices
Fundamentals of Organizing: Structural Design and Its Implications for HRM Practices
The curriculum for coursework in HRM has focused mainly on functional knowledge and skill acquisition necessary to practice within an undifferentiated organizational structure. There is growing evidence, however, that expanding the HRM curriculum to include more extensive coverage of organization theory—particularly elements of organization design and structure—will be a necessary requirement of the future for HR professionals within large and global organizations (e.g., Child & McGrath, 2001; Dijksterhuis, VandenBosch, & Volberda, 1999; Goold & Campbell, 2002; Lewin, Long, & Carroll, 1999).
This chapter's focus is the structure of organizations and its implications for HRM. Although organizations emerge in different historical times and face varying contingencies, the characteristics of their structures tend to flow from a relatively limited set of concerns, such as distribution of decision-making responsibilities and authority, the rules and procedures necessary to handle contingencies, and complexity (occupational specialties within the organization and within its divisions, the number of divisions, the scope of its domain; e.g., Hall, 1999). Those characteristics vary among organizations, and that variability results in different choices of common structural forms. An organization's configuration reflects the form or combination of forms it chooses to use in arranging its parts in ways that will ensure achievement of purpose.
Organizational structures have consequences for organizations, the people within them, the people who have contact with the organization, and the society of which they are a part (Hall, 1991). Consequently, understanding the common structural forms and their current variants as well as understanding why organizations and their subunits structure their activities the way they do has important implications for the management of human resources. Specifically, to achieve efficient and effective management of people, the HRM function should develop policies, plans, and programs that fit the shape of the organization's structure or, in the case of a diversified or global firm, the shape of each subsystem within the organizational system (e.g., Hall, 1962; Litwak, 1961).
This chapter is organized into three sections. The first section presents three basic structures and their modifications. The second section discusses research on the determinants of the organization's structure and presents a conceptual framework for understanding structural variations. The third section discusses implications for HRM.
Three Basic Structures and Their Modifications
This section examines three common structural forms: functional, divisional, and matrix. I start with the functional structure, as this has been the dominant structure since the Industrial Revolution. This form has been modified and continues to be modified as the competitive environments change and the need arises to adapt to those changes. I discuss modifications to the functional form last, as these modifications also apply to the structures of all three organizational forms discussed in this section. Figures 15.1, 15.2, and 15.3 graphically represent the three structures.
Functional Organization
The functional form is sometimes called centralized, bureaucratic, classic, and mechanistic. It is a formal arrangement that divides labor by grouping activities by the input necessary for performance of specialized tasks or functions. The principle guiding this form of organizing is specialization, with each function—production, finance, marketing, sales, and so on— focusing on the efficient performance of the function's assigned work. In a functional organization, specialized departments work independently of other departments, and their activities are coordinated through a management hierarchy. Top management makes major decisions about the organization's offerings. Hence, the functional structure is called centralized. It is also called bureaucratic because the organization is managed by prespecified rules and procedures and an authority hierarchy. It is called classic because it is the traditional form that came into existence from growth of smaller organizations into large industrial ones (see Weber, 1946; Fayol, 1916/1949; Taylor, 1911/1942). It is called mechanistic because people are expected to follow the rules and procedures in doing their work and refer unique problems to their immediate managers for resolution. If those managers cannot resolve the problems, they will send them up the chain of command for resolution. Ideally, this results in an organization that functions efficiently, much like a smooth-running machine.
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