Simple Structure

Defining Simple Organisational Structure

• Quick decision-making process since there are fewer levels of communication.
• Greater level of control by the top manager or owner.
• High level of flexibility and adaptability to changes.
On the other hand, potential disadvantages could be:
• Limited growth potential due to the heavy dependency on the manager.
• The risk of decision-making errors due to centralised decision making.
• Employee burn-out due to heavy workload.

History and Evolution of Simple Structure

The simple structure is an integral part of the organisational theory history. It originated during the early stages of industrial revolution, when businesses were typically small and run by single owners. Over time, as companies started growing and expanding, the limitations of the simple structure led to its modification, and thus, more complex organisational structures evolved. However, in today's business world, the simple structure is still prevalent in many small businesses and startups, and has even seen resurgence with the rise of the gig economy.

The concept of simple organisational structure can be traced back to the works of Max Weber, a German sociologist, who described it as a form of 'bureaucracy'. Over the years, it has evolved and adapted to suit the changing business landscapes and remains a popular choice of organisational structure among small businesses and startups today.

Here is a tabulated view of the journey of Simple Organisational Structure through ages :

Early Industrial Revolution	Emergence of Simple Structure
Post-Industrial Revolution	Need for more complicated structures
Modern Times	Resurgence of Simple Structure in Startups

Necessity of Simple Structure Technique in Business

In the world of business, organisational structures play a pivotal role in shaping the company's culture and operations. A simple structure, in particular, serves as the backbone of many small businesses and startups. It's straightforward and efficient, eliminating unnecessary levels of hierarchy and fostering a culture of direct communication and prompt decision-making.

Role of Simple Structure in Business Management

In a business setting, the simple structure technique serves several crucial functions that allow businesses, especially smaller ones, to operate with efficiency and agility.

The simple structure is characterised by a single vertical line of command that flows directly from the top, often the owner-manager, to the bottom.

In such a structure, there are usually no specific departments, and the staff may perform multiple roles. Here are some of the ways the simple structure benefits business management:

• Enhances Direct Communication: In a simple structure, communication flows directly from the decision-maker to employees, reducing misunderstandings and miscommunications.
• Facilitates Rapid Decision-making: Decisions are taken at the top level and then quickly transmitted down the line. This makes the decision-making process straightforward and fast.
• Encourages Flexibility: Given its flat nature, a simple structure can quickly adapt to changing market conditions or business requirements.

Pros and Cons of Implementing Simple Structure

While there are benefits of using a simple structure in business, it has its potential pitfalls that could hinder growth or even destabilize an organization if not addressed timely. Let us first glance at the advantages, graphically represented in the following table's first column:

Pros	Cons
Greater responsiveness to changes	Limited scalability
Direct and efficient communication	Risk of overdependency on the manager
Clear accountability and responsibility	May require employees to wear many hats

These cons, summarised in the table's second column, reiterate that while a simple structure is beneficial for small businesses, as the business grows, it could face challenges like scalability and over-reliance on the owner-manager. Therefore, like all other organisational models, a simple structure has its strengths and weaknesses and should be chosen wisely, keeping in mind the company's size, industry, and future growth plans.

Real-World Simple Structure Example in Business

Taking a dive into the practical world of business, let's explore how the simple organisational structure operates in the real world. A great example of this is the infamous "Mom and Pop" shops—small, family-owned and operated businesses where decision-making rests with the owner, and employees often wear multiple hats.

Case Study: Simple Structure Company Example

A prominent example of a business that initially adopted a simple structure is the global giant Amazon. In its early years, Amazon exhibited many characteristics typical of simple structures. During its inception, Amazon had a flat managerial hierarchy. Jeff Bezos, the founder, had a direct relationship with his small team of coders and marketers. There were few layers of management, enabling swift decision-making and a straightforward communication process.

Amazon started in 1994 as an online bookstore operated from Jeff Bezos' garage. During its early phase, it had a flat structure with a handful of software engineers and a couple of managers. The structure allowed for fast decisions—Bezos could quickly resolve any issue or seize new opportunities, contributing to its quick success in the online market. As the company grew, so did its organisational complexity. Today, Amazon is a multinational corporation with a more complex structure but still maintains its customer-centric approach fostered during its days with a simple structure.

However, it is noteworthy that while a simple structure facilitated Amazon's agile progression in its early stage, it evolved into a more complex one as the company grew and expanded into various sectors.

Analysis of Simple Structure in Different Industries

The implementation of a simple structure can vary greatly among different industries. For instance, in the service industry—especially in small restaurants and hospitality businesses—the simple structure can be quite prevalent. In these cases, the owner, possibly with a small team, manages various tasks from procurement to customer service. This structure's adaptability makes it easier to cope with the industry's dynamic and sometimes unpredictable nature.

In the fast-food industry, many businesses start with a simple structure. For example, a food truck business generally starts with the owner managing everything, from cooking to interacting with customers. As the business grows, it might remain a simple structure, or it may eventually branch out into different departments, depending on its scale and needs.

On the other hand, in manufacturing industries, even small businesses may require a more complex structure due to their need for various specialised departments for functions such as production, quality assurance, and logistics. Though the owner-manager is the decision-maker, the organisation may need a semi-complex structure to manage specialised tasks efficiently. Thus, while the simple structure's agility may suit dynamic industries, its adaptability may be strained in sectors requiring specialised divisions from early stages. Finally, it is important to note that while simple structure is beneficial for many organisations, it is not a one-size-fits-all solution. Various factors, like the size of an organisation, the nature of the industry, and the organisation's growth, play a decisive role in determining the most suitable organisational structure.

Simple Structure - Key takeaways

• A simple structure in organisational behaviour refers to a structure where authority rests with a single person who makes all strategic decisions.
• A simple organisational structure is a managerial hierarchy where the top manager shares a direct relationship with every employee, enhancing communication and decision-making process.
• The simple structure technique originated during the early stages of the industrial revolution and has evolved over time suited for small businesses and startups.
• Simple structure in business management facilitates direct communication, fast decision-making, and flexibility. However, it also presents challenges regarding growth potential and heavy dependency on the manager.
• Real-world examples, such as Amazon, illustrate the effectiveness of the simple structure on a company's early stages. However, as companies grow, they often need to transition to more complex structures.