Mechanistic Organizations
Organizations with a mechanistic orientation need to favor vertical specialization and control. This stresses rules, policies, procedures, and specific techniques for decision making, and it develops elaborate and well-documented control systems backed by centralized staff. The functional form of departmentalization is common in mechanistic organizations. This configuration is entirely consistent with the desire for operational efficiency. It is presumed that the technology of the organization is well known and that only a limited range of products or services is produced.
Mechanistic organizations generally produce low employee satisfaction and have difficulty maintaining human resources. In addition, the mechanistic configuration is ineffective for spotting small but potentially important variations in the environment. The attention of most mangers is directed toward vertical considerations. External communications within and outside the organization are sacrificed for responsiveness to top management.
In our opinion, banks have typically chosen a mechanistic configuration over the past 50 years. Banking has a history of a very stable environment, especially prior to 1980 when the first effects of industry deregulation were being felt, and in fact a mechanistic structure was entirely appropriate for a bank prior to 1980. Banks were virtually immune to dramatic shifts in goals, competitive pressures, and environmental contingencies. The focus, rightly so, was on operational efficiency. This provided banks with consistent performance and market share relative to other bank competition.
Organic Organizations
Organizations with an organic orientation tend to focus on horizontal specialization and coordination. Typically, in the absence of strict rules and procedures, managers are given broad objectives with only general guidelines about how to proceed. The organization must rely, at least in part, on the judgment and professionalism of its personnel. Management is expected to work closely with fellow managers and subordinates. There are few written documents outlining procedures, but guidance is available from all supervisory levels. In the organic orientation, successful managers are more aware of subtle changes in the needs and desires of customers and employees. Much time is devoted to external relations and communications. This configuration works because information can easily penetrate the organization and be circulated among key decision makers. Subunits can make rather small adjustments to particular markets or customers. Employees tend to view organic structures as flexible, nonbureaucratic, decentralized, and participative. As a result, turnover is generally lower and commitment to organizational goals is higher.
Advertisement