Page 82 - CMA Journal (Nov-Dec 2025)

Articles Section
Articles Section

Organization Structures

and Performance

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Organizations’ performance is a complex and abstract tives’’ cumulativ

function of many variables, namely: clarity of directions; performance as their
individuals’ competence level and motivational own. Quote: “Once a
orientation; social interactions within the organization; training officer who Sohailuddin Alavi
task autonomy and coordination; and last but not least, was tasked to manage HR/Organizational Development (OD)
work culture. Organizational structure needs to be sponsored trainings Consultant and Executive Coach
compatible with the nature of these variables, for it can listed all the programs
either facilitate or restrain performance. Recognizing this he developed and executed in his Performance Review.
critical function of structures, organizational His manager, a typical administrative manager, called
practitioners and theorists have propagated different him in and argued that whatever he had done, he did on
structures, such as tall administrative hierarchies based the manager’s behalf; therefore, he should delete all the
on division of labor; flat hierarchies with broader spans of programs from his Performance Review as they will be
control at individual managers’ level leading to cost reported under the manager’s performance review.”
efficiencies; reformed hierarchies which aim to optimize Unquote.
the advantages of conventional administrative
Flatter hierarchies are designed to reduce the number of
hierarchies while instilling synergy in the organization’s
administrative positions by assigning enlarged and
processes; and team structures, introduced essentially to
enriched responsibilities to fewer persons. However,
execute complex projects. Let us do a critical review of
managers still operate from an administrative
each type with the aim of understanding when and
orientation, with the exception that their span of control
where a particular structure fits best.
is widened. Consequently, the middle tier is considerably
Tall administrative structures are control-oriented and reduced, thus reducing costs. However, the need for
are suitable for work situations where efficiency prevails instilling synergy in the overall organizational process
over effectiveness and mechanistic discipline is required. remains unaddressed.
These are typically the product of Theory X. Individuals
Hierarchical structures are not dysfunctional in absolute
are required to execute broken and simplified tasks
terms. They have some critical advantages, such as
repetitively, thus reducing response time considerably.
providing a basis for discipline, systematic
Individuals with minimum skills usually suffice. However,
communication, and, last but not least, order. However,
the environment is generally too mechanistic, which
the overly administrative system and status
inhibits sense of achievement and shifts motivational
incongruence built into it undermine these advantages.
orientation from work excellence to personal
A reformed hierarchy can help optimize advantages and

gratification, therefore generally inhibiting individuals’
eliminate disadvantages.
productivity. Hierarchy syndrome is also manifested in
the process of passing on task responsibility from one A reformed hierarchical structure requires minimizing
individual to another until it reaches the most junior the administrative role of managers, empowering them
person. In such cases, people in the middle do nothing to perform complex technical and managerial activities,
but pass on their task responsibility to the next junior and tasking them to contribute real value to the
person. In other words, there are more supervisors than organization. Managers who were previously
doers. The development of this structure coincides with functioning mundanely as administrative managers
the industrial revolution, which required mass should be retooled as process managers and tasked to
production. Hence, it very well fulfilled the needs of that add additional value to the organization’s value chain. In
era, but may not be suitable in other scenarios. the emergent scenario, jobs of managers and executives
are redefined along the organization’s value chain, as one
Though tall hierarchies are pyramid-like structures, they
person’s output becomes another person’s input.
are inverted in the sense that they contain more adminis-
Moreover, individuals along the hierarchy should be
trative positions and fewer executive positions, meaning
identified by their respective value-addition roles rather
more people are tasked to control fewer people, such as
than by their status, with a clear understanding of their
in the middle tiers. Consequently, their performance is

interdependencies, communication channels, and
minimized, and they tend to claim subordinate execu-
coordination lines.
80 ICMA’s Chartered Management Accountant, Nov-Dec 2025