Organization structure, attitudes and performance

For today’s ‘Matrix Monday’ review of the limited literature available on the matrix, today Kevan Hall  revisits an older paper, Organization structure: how does it influence attitudes and performance.

This is quite an old article and predates some of the complex, matrix, networked and virtual organization structures that we specialise in today, but I thought it was worth reviewing as it is, in it’s turn, a review of 50 studies of the impact of structure on attitudes and job satisfaction.

It reviews studies that looked at a number of factors in organizational design, including the vertical level of the position held, the nature of the authority in the position, the span of control, the size of the sub-unit that people work in (i.e. the department), and the total size of the organization.

It compares these factors with measures of attitude and job satisfaction. Many of the studies are ambivalent but there were a few trends they felt confident to remark upon in the conclusions:

• As we move up the organization, satisfaction increases;
• Senior executives are more satisfied in more hierarchical organizations, but middle managers are more satisfied in flatter organizations;
• For lower-level employees, job satisfaction increases as decentralisation increases.

These findings relate very strongly with our own experience of control in organizations. If someone else has control over you it feels bad; if you have control, it feels good. Empowerment is not about not having control, it’s about who gets to exercise it.

It is interesting though that whilst lower-level employees prefer decentralisation (it gives them more power and control), this may not improve the satisfaction of their managers.

The other factors in organizational design were not found to have a simple relationship with satisfaction or attitudes – the studies were ambivalent or not statistically significant.

Whilst a lot has changed since 1976, organizations have become more complex, more connected, and more international, I would still be pretty confident that the basic psychology that underlies these findings is still in place.

As we work (at Global Integration) with leaders, teams and individuals, we are always looking for ways to help them take more control and autonomy in their work, and it seems as though this is one very important part of creating higher levels of satisfaction and engagement.

In a matrix organization, this decentralisation is particularly important because if the individual at the point of intersection of the reporting lines cannot exercise control, then they will constantly be escalating for decisions. Constant escalation undermines the confidence of their managers and leads to a negative spiral of increasing control and escalation.

On the other hand, as middle managers have to share control and get more done through influence, will they experience a reduction in job satisfaction themselves? It probably depends on how much they themselves are empowered.

Source: Organization structure: How does it influence attitudes and performance? Cummings, L. L.; Berger, Chris J. Organizational Dynamics, Vol 5(2), (Autumn) 1976, 34-49