Corporate Entrepreneurship: Organisation Structure Theories

Introduction

Corporations differ in many ways, and there is little that individuals can do to change how well they function. Each is a collection of employees put together by entrepreneurs into a semblance of order based on a logical relationship between them (Romero-Silva, Santos, and Hurtado 2018). The arrangement and set of people create the organizational structure. It represents the formal division, grouping, and coordination of tasks resulting from meticulous company design. Throughout the world, entrepreneurs create different-structured firms based on their knowledge, skills, experiences, and prevailing circumstances. Common examples include vertical-hierarchical, matrix, and organic entrepreneurial structures (Rezazadeh and Kordestani 2019). Understanding an institution’s setup is essential because all businesses share the fundamental feature of employee interconnection. As such, a person attached to a car manufacturer and seller as a manager learns essential bits of information that they can apply in another job, for example, in a new role as an executive in a beer brewing and selling company. Indeed, the concept of organizational structure makes it meaningful to talk of experienced workers without necessarily referring to the business or industry to their former employer belonged to. An organic organizational structure, such as the one used by Google, leads to efficiency because it reduces complexity and eliminates duplication.

Vertical-Hierarchical

A vertical-hierarchical organization is one in which the connection between employees comes into being when the basis of the decisions made by one individual are rules, regulations, and policies created partly or wholly by another. The ordered set in this entity is rank-based because the staff’s dependence follows an up-down logical association (Badcock, Friston, and Ramstead, 2019). Company executives are often at the top of the leadership pyramid (see Figure 1) and make rules and approve processes intended to grow the enterprise and increase shareholders’ value. However, the implementation of the orders and instructions they give is the responsibility of middle-tier and entry-level personnel, including departmental managers, sectional supervisors, and factory floor recruits (Gentile-Lüdecke, de Oliveira, and Paul, 2020). The perpendicular ordered approach is the most traditional of all company types. It may be characterized by reduced flexibility and high rigidity as most processes and significant decisions may require a senior leader’s approval. Such institutions often place greater attention on individual subordinates due to the existence of a narrow control span, which corresponds to a “taller” company, that is, one with more ranks. Leaders with many juniors have a difficult job because they must use more energy and time to manage them effectively.

Matrix

A matrix structure allows members of staff from different departments to collaborate on special project teams. It ensures that companies have the flexibility they need to respond quickly to emergencies or new developments (Dedahanov, Rhee, and Yoon, 2017). For example, when there is a surge in customer demand or when specific client requests arrive, leaders can create a dedicated team that devotes all its time to addressing those issues. Often, members of these groups return to their respective sections or join new formations as soon as they complete the first task (Moşteanu, 2020). Matrix structure is more prominent within large corporations such as Airbus, which undertake massive projects annually. Enterprises that utilize a matrix structure understand that each department has specialists or experts that can form part of a dedicated team mandated to attain specific results within a given time frame. The decentralization of the decision-making issues and the strong coordination of individuals increase positive outcomes for this design type. Unfortunately, the administration cost may increase, and confusion over responsibility and authority may arise as well. Figure 2 illustrates this design form; its top level represents the executive leadership, and the middle comprises standard organizational functions.

Organic Entrepreneurial

An organic entrepreneurial organizational structure is a more contemporary approach to the division of tasks and grouping of responsibilities within a firm. It is characterized by adaptable duties, vertical and horizontal collaboration, fewer rules, flatter structures, decentralized decision authority, and informal communication (Kessler, Nixon, and Nord, 2017). This organizational structure aims to eradicate the bureaucracy of the tightly controlled structure of mechanistic organizations. Thus, it tends to be highly adaptive and flexible and lowly standardized or specialized. They can adapt rapidly to change owing to loosen arrangements and broader spans of control. Instead of strict rules and regulations, shared goals and values guide individual behaviors in organic organizations. As shown in Figure 3, the organic institution is free-flowing compared to the rigid traditional company design. Organic firms are also high in autonomy and individualism and support innovation and change (Pasricha, Singh, and Verma, 2018). Employees are free to identify the best alternative to attaining specific results, and leaders exist primarily for administrative purposes. They avail resources for all the workers and rarely give commands or instructions on how people approach their duties. The owners of organic institutions believe that no matter a person’s level in a company, they can contribute positively to growth if they get the chance to be creative.

Although organic structures are appropriate within any industry, they thrive best where creativity and innovation are the most valued qualities. For example, within the information technology sector, firms that use organic structures tend to move faster and develop quickly. Part of the reason for this is that the employees work in an environment that encourages them to think creatively and try unique solutions to see which one works better. The personnel is also free to design their approaches to completing tasks, provided they meet specific milestones or complete certain duties within the expected time frame (Pasricha, Singh, and Verma, 2018). The only challenge with this type of structure is that organic organizations may inadvertently stiffen collaboration by encouraging individualism. It may also be challenging to agree on how to complete specific duties as each employee may know how to proceed. Other than that, organic companies provide conducive environments for employee growth and development. They offer people opportunities to discover their talents and utilize them fully for personal and organizational growth. Entrepreneurs often deploy organic structures in unstable and dynamic environments where they need to adapt speedily to changes.

How Google LLC Practically Builds an Organic Entrepreneurial Organization

Google encourages all its staff to think and act as entrepreneurs to realize its enormous innovation potential. It builds an organic entrepreneurial organization by organizing human, technological, financial, market, physical, and leveraged resources. Google’s parent organization – Alphabet Inc. – employs more than 135,000 people across the globe and is spread in marketing, engineering, operations, and sales function (Majumder, 2016). The company offers all its employees an opportunity to be creative and innovative by letting processes flow in a natural process. For instance, rather than create the usual office spaces, Google maintains its campuses as centers for creativity and innovation. Its global headquarters – Googleplex – located in Mountain View in California in the USA is a development site where employees work with great flexibility. Although individuals may have offices, they are free to use the cafeterias, backyards, and play areas to do their jobs with minimal stress (Stewart, Nodoushani, and Stumpf, 2018). The company understands that demanding that people work in strict cubicles can cause stress and tension, which reduces overall productivity and the quality of output.

At work, Google employees can also eat every available meal for free. Bicycles available across the campus let them move conveniently from one location to another without worry. None of them ever has to go to work with packed lunch or leave the office complex for a proper dish in the middle of a busy day. Employees can access the campus cafes and mini kitchens to order anything on the menu and eat it without paying a single coin (Luenendonk 2019). The cafeterias also have fast internet connections and sitting arrangements designed adequately for ergonomics. A person can send or reply to emails or do other work in the cafeteria while waiting for their meals to be ready. Apart from saving employees a significant amount of money – that could have been spent on food – free food addresses a challenge that could otherwise affect worker productivity and innovation. Because the employees will never have to worry about food, they use their time and resources to create innovative products. The perks that Google employees enjoy also lead to job satisfaction, which reduces the turnover rate.

In addition to fulfilling its employees’ physical and health needs, Google also offers technological resources that individuals need to work conveniently and undisrupted. These include high-speed internet connections, quality computers, and hardware devices, and the latest technological trends (Inside Google’s culture of success and employee happiness n.d.). The company avails these IT resources and allows workers to utilize them as they deem fit. Some employees are inspired to contribute to technological development by using these gadgets. Not surprisingly, Google owns significant intellectual property and know-how in many areas. For example, in the internet search engine, intellectual property rights belonging to Google are storing, indexing, crawling and organizing data. No other internet search engine can scour the internet and return accurate results as fast as Google does. The technical know-how and intellectual properties result from and contribute to creativity and innovation at the company (How we care for Googlers n.d.). People receive rewards appropriately for original ideas that lead to novel organizational processes at Google. For this reason, workers think of entrepreneurs and are usually eager to innovate.

Google also has a network of data centers and various software and hardware products to harness the computing power and make it readily available to consumers worldwide. These physical resources add to Google’s appeal and continued use of organic structure. Employees can utilize the resources and attain growth and entrepreneurial skills through continuous improvement (Hartmans 2016). The employees use these resources to find the best approach to solving customer needs and creating a profitable organization. Notably, Google sees its employees as partners rather than contracted individuals. The employees feel like part of the company, and they do everything within their powers to ensure the institution stands and grows. They are deeply invested and emotionally attached to the institution, whose continuous growth is their pride source. Because the company extends excellent flexibility and reduces decision authority, employees have developed a sense of initiative and responsibility that guides their daily drive. They know that they are accountable for the company’s success or failure. If the company fails, the workers will lose much in job flexibility and all the perks that come with working for Google.

Financial strength is another critical capability that has allowed Google to grow to an extent that it has become today while maintaining an organic entrepreneurial structure. Decentralizing decision authority and increasing flexibility at work require serious investment in assets and related infrastructure (Gaspary, Moura, and Wegner, 2020). Google has used its financial muscle and technical know-how to create and avail resources that employees need to remain creative and innovative. The vast financial resources at the firm’s disposal have also allowed it to create adaptable duties for employees and enhance omnidirectional collaboration.

Conclusion

The organizational structure represents the arrangement of tasks and responsibilities within a company. It influences how individuals relate with each other and implement the organizational goal. Some companies have a rigid system where top executives wield the most power. They make all the decisions and instruct their subordinates on what to do. In such companies, much bureaucracy stiffens creativity and innovation, and affected companies may take a long period to grow. In others, the structure is flatter, and fewer rules exist. These are the organic institutions, which also feature informal communication, low specialization, and high adaptability, with Google being a perfect example. The company values its workers and creates an environment that encourages them to be creative and innovative. It recognizes that its employees are its most dependable partners and does everything to promote an entrepreneurial culture. Google continued utilization of organic entrepreneurship reduces complexity, eliminates duplication, and increases efficiency.

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