Mechanistic Versus Organic Structures
We have introduced the notion that the field of play had changed and is continuing to change for banking at an increasing pace. Further, we have indicated that, too often, current banking structures serve to inhibit the type of responses necessary to survive and prosper in times of fast-paced environmental change. In this section we examine characteristics of two general structures that we feel can have a significant impact on banking. First, we discuss mechanistic structures, characterized by rigidity, much structure, and very centralized operations and decision making. Second, we discuss organic structures characterized by flexibility, loose structure, and decentralized operations and decision making. Mechanistic and organic structures are conceptual orientations rather than concrete organizational structures. However, mechanistic organizations usually take the form of highly structured, functional forms of organizing, while organic organizations typically follow divisional and matrix forms. The characteristics for both mechanistic and organic organizations are shown in Figure 8-9.
FIGURE 8-9 Characteristics of Mechanistic Versus Organic Organizations
Mechanistic Organic
Authority Centralized Decentralized
Rules Many; rigid Free; flexible
Departmentalization Clear-cut Ambiguous
Job definition Clear, limited scope Broad, open-ended
Coordination Formal Informal
Control Impersonal Personal
Standards Rigid Flexible
Decision making Management science Creative, innovative
techniques
Delegation Little Much
Span of control Narrow Wide
Performance criteria Specific, output oriented General, development oriented
Emphasis of performance Hours, work performed End product
Information flows By hierarchical structure Across hierarchial lines
Leadership style Autocratic Democratic/participative
The structural configurations of a bank should be consistent with the bank’s goals, environmental threats and opportunities, size, and technology. The key question that bank managers must address is: How should structure be adjusted to meet major problems and opportunities, and thereby allow the bank to accomplish its purpose?
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