Why do organizations undergo changes, what are the reasons for this dynamism and what impact do these changing organizational structures and designs have over these entities are questions which are asked by eminent scholars from ages now. This paper will enable to answer some of these questions by taking the example of one of the most sought after companies of today’s era- Facebook Inc. The discussion paper clearly describes the chain that leads to changes in any organization structure and design since its inception. Longitudinal research and empirical evidence has been used as methodologies that clarify the relation between the concepts and theoretical background.
Before we understand the concept of organizational structure and design and how changes take place on a continuous basis even within an organization which is known to have the best structure in place let us understand what the company is all about. The said company was formed in 2006 and in a very short period of time has become the king of the social networking sites and presently it is serving nothing less than one billions users but with an employee strength of only 3000 which is a remarkable figure in itself. The founder of the said company is one of the youngest entrepreneurs- Mark Zuckerberg who started off with this idea of social networking in the year 2004 amongst a group of small people of Harvard until they decided to make it big. In 2012 it issued its first IPO and was very successful in it. The organizational structure and design of the said company is very different, a brilliant example of how a young man could think out of the box while developing its own company structure.
Facebook’s organization structure and design can be well understood once this concept is clear to the readers that what do we mean by organization structure, its importance and how can bringing in continuous changes into a structure help the development of the entity as a whole. Every organization feels safe and secured within the present structure and are generally disinterested to welcome any change due to fear of losing their job in case they are unable to adjust with the changes. No organization has an ideal structure but they can always work towards achieving a structure and design which is nearing to perfection (Carus, 2008).
Various researches have proved that a good and a flexible organizational structure and design is one of the contributories for a growth oriented organization. Thus its importance cannot be ignored. A well defined structure of any corporate house whether big or small leads to higher productivity outputs as well as better performance in monetary terms. Further it also boosts the morale of the employees at all levels. A well knitted structural design is definitely what counts towards the progress of any organization but at the same time the people who fill up the various positions in the design being put in place also play a vital role(Valencia, et.al. 2010). Thus the success of an organization structure and design is equally dependent upon the process in place and the human capital it employs. This is the formal description of the organizational structure which is spelt out by the management but apart from this another informal structure takes birth in every organization and that is the groupism amongst employees and the relationships they develop while working together within the said structure. This ultimately also become a part of the organization structure (Bridgespan.org. 2009).
An organization structure is a layered structure comprising basically of three hierarchies which are all interrelated to each other. They are the managerial level, technical level and the institutional level. Any structure which is being put in place within an organization should identify itself with the goals and objectives set out. The structure designing should be such so as to account for the behavioural pattern of the staff as well as the customers and how it motivates and drives towards achievement of goals. Also an organizational structure and design if is flexible then there is ample room for innovation (Essays, UK. 2013).
First and foremost the present organizational structure and design in vogue at Facebook Inc. needs to be understood and analysed with regards the gaps which are there and it is only then can the solution to bridge the same can be found. An organization’s structure and design is very much related to the kind of culture that is prevailing within the organization. The organization structure adopted by this social networking site entity is a rejoinder to the dynamics of the universal online public medium. Its structure is not a closed one instead it is designed in a manner so as to enable its social media business to enlarge and branch out. The company’s main focal point is to welcome innovation and thus it has designed its structure in a way which addresses this condition very well. It follows a matrix form of organization structure wherein the employees are to report to more than one superior. It may seem to be a very simple structure but the same is very complex in nature as there are levels of direct strong reporting as well as weak reporting lines (Dozier, 2012). Facebook’s organizational structure has three main features which are enumerated as under:
Corporate Function-Based teams: Teams are formed within the organization basis the functions required to be performed for management of the operations of the organization. Facebook being a social networking site requires a strong team which conducts research and development activities on an ongoing basis. As is the nature of a matrix, the said organizational structure have very thin line of differentiation with the other divisions of the organization (Jana, 2013).
Geographical Divisions: Division of the organizational structure basis regions is another form. This division is a necessity for the company due to the various marketing gimmicks which are to be performed depending upon the region. The main reason for such a division is the behavioural differences amongst the public and the various advertising agencies. Further since the company has expanded world wide, the human capital employed is also region based which is very much required to address various regional issues which the company faces from time to time. Even though it has regional divisions yet it does not have officers specially allocated for these regions. Being a part of a matrix kind of a structure, Facebook Inc ensures that resources are shared between the regional divisions and the various function based teams.
Product-based division: Apart from Facebook – a social networking site, the company offers many other products such as messenger. Thus it also have divisions basis the various products that are there. The various managers who are a part of the function based team of the organization are also asked to divert their time towards these product based teams also. Even though its main focus is on development of the social website- facebook yet it is always on the look out for further diversification in its product line (Huraira, 2014).
Another very striking point on the organizational structure of Facebook is the openness and transparency. Nobody is a judge here, not even the CEO- Mark Zuckerberg. All are entrepreneurs who have the ability to think themselves rather than just judge others work. The culture is that based on a model wherein they themselves are the trial runners. People are not allowed to just sit in their cabins and approve, rather adopt a more participative approach. The company’s structure is designed in such a manner which enables transparency and inculcates people of all levels to participate in the process before judging (Albergotti, 2014).
Many other factors influence an organization’s structure and design and Facebook Inc. very well understands the same. The interiors of an organization are also very important factor for any structure to work well. The interiors are very striking distinguishing it from the other corporate houses. The wall colours which have a very vital effect on the minds of the workers and the employees are very soothing and makes one feel at home. Furniture and the walls are made mobile so that the environment seems lively enough to motivate the employees to adjust with the matrix structure of the organization easily (Arthur, 2010).
However, the matrix structure has in itself some advantages which cannot be let go off such as the flexibility which basically helps the company to respond immediately to the various changes happening. Secondly this structure also allows better rule at the corporate level (Johnson, 2012). However it has some disadvantages also which the company needs to address. A common corporate directive is difficult to implement in the entire structure due to regional differentiations and variations in activities undertaken (Bazigos & Harter 2016).
Even though the company follows a matrix structure which calls for multiple reporting at various levels yet its main motive is that people working in their organization should have fun while working. The employees have the liberty to switch between their assignments at any time even if the same is out of purview of their excellence. Workers of all level are encouraged to question and criticize. The company gives least credit to the position at which a person is working. Its main focus is on the performance level of people, their dedication and power to influence the people around them. However this kind of structure can be disheartening for the employees who are old to the organization and those who have a good experience(Kelly, 2011).
I think this is probably the only company who encourages the employees to work with risk and not to pay heed to the consequences. The company concentrates into hiring people of a younger age group where data flows without many barriers. However even though the said organizational structure and design may seem to be very nice at its brim but the same has a lot of loopholes too which needs to be addressed well. Too much of decentralization of the decision making process, few controls may be hazardous for the health of the company. It is agreeable also that no structure is full proof and all have some issues which need to be addressed time and again (Ashkenas et.al. 2015).
High administration cost may not be the issue for Facebook Inc. as its main purpose of employee satisfaction but the matrix organizational structure adopted by the company has led to a potential risk of confusion with regards fixing up of responsibility. When the said structure was put in place then the company’s size was relatively small but as it expanded and opened up its offices across the globe it should ensure that the matrix organization structure alone will not serve the purpose. It has to adopt two three structures, mix it well so as to get an ideal organizational structure. The social networking website which the company caters to definitely needs to be receptive towards the external changes undergoing. Thus the structure is considered to be ideal for such an organization, however catering to only one aspect will not resolve the other integrities of an organization. A line has to be drawn with regards implementation of the present structure. This structure most of the time ends up leading to animosity between the function based teams and the product based teams due to over lapping of some decisions (Purkayastha, & Qumer, 2011).
On analyzing the issues that the company is presently facing and before the same turns out to be critical a balanced structure should be put in place. Some sort of command is a must so that the loose ends of an organization can be tied up. Even though the position of manager is not of utmost importance yet some degree of responsibility and authority should be imposed upon them. Human nature is such which craves for power(Neilson et.al. 2015). Some degree of power is needed else retention of employees would become difficult for them as they would not see any career growth. Other companies would be reluctant to hire people who have worked with Facebook Inc due to a feeling that they lack the zeal to acquire responsibility in their performance. This can have a negative impact on the career graph of the youngsters who have started off with their career recently and have a long way to march ahead. Thus accountability should become a part of the organization design. Initially the same is looked at in a positive manner but as the years progress the same turns into pessimism as it is viewed as a hurdle (Knights, & Willmott, 2006).
Decentralized structure is very constructive for Facebook Inc. but not at all levels. Some decisions which are crucial and confidential should be centralized especially when it is expanding at a multiplying rate. Without hurting the capability of its employees which is the crux of Facebook, the company can invite suggestions and views but the ultimate decision should be taken by the authority responsible without any influence (Swift, 2011).
Too much of anything is harmful and so is an informal environment at all levels. Some sort of formalization should be inculcated. Every geographical division and the people there do not have the same behavioural pattern and their ways of looking at work culture is different. Thus the matrix organization structure though would be installed into all the branch offices of Facebook but the same should be modified as per the people around (Bigman, 2012).
The most amazing analysis that was done with regards the culture and structure of the company was that it has changed its way of working over the years. When it was small in size it always had the appetite to tolerate mistakes which is very risky. Hardly any organization would prefer to do the same when it is at its developing stage and a mistake can also lead t its subsequent failure. But Mark Zuckerberg chose to think out of the box. But soon the same underwent a change which said that the employees should move fast but without making mistakes. Mistake should be avoided and this shows that the company understands that as it grows it needs to ensure that some fundamental changes are brought so that the main goal is not lost in the wake of expansion (Lombardo, 2016).
Thus on a conclusive note, I would like to recommend that though not much changes is required to be done in the present organizational structure and design which is in place presently at Facebook Inc. yet some issues should be fixed before they start to grow as the company grows in future (Finch. 2011). Presently it is just a decade old and lacks much of an experience with regards the type of structure it presently follows. A mix of two-three structures is the need of the hour due to expansion in various countries which have different patterns and ways to work. A company stands upright till it has a strong structure and design in place as all the other things are dependent on this. The way employees behave, expectation from them, the kind of environment provided all are directly proportionate to the kind of structure that is in place.
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