The development of management theory, similar to social development, generally passes through separate stages. Each of these stages creates different schools and strands that explain the ways of effective management, the principles of organization and staff leadership, and so on. This report presents the current trends of development and improvement of organizational management structures combined with Max Weber’s bureaucratic concept. Key aspects of the structural policy of organizations, as well as the introduction of flexible organizational forms such as Google, are discussed. The analysis of current trends for the future development of organizational governance structures should be an integral part of each organization’s management policy. Trends are the flexibility and adaptability of the organizational structure, the rationality of centralization and decentralization, the appropriate balance between rights, obligations and responsibilities, the reduction of regulations, rules and other normative documents. It is recommended that organizational management structures should be constantly adapted to changes in the overall management system as they are one of its main components.
M. Weber’s bureaucratic concept is mainly related to his ideal-type methodology, his theory of rational economic behavior, division and specialization of labor, as well as the relationship with the typology of power and economic sociology.
The most important principle for understanding bureaucratic theory is that of rationality. The rationalization of social activities, M. Weber, is defined as a global historical process, especially in the era of industrialization. One of the characteristic manifestations of rationalization in his view is to replace the internal motivation and attachment to the traditions of adaptation of people to considerations that ensure their interests and benefit. The way of keeping the farm is streamlined, the management is rationalized, the image of life, people’s thinking and feelings is rationalized. The rationalization of economic activities is increasing thanks to the separation of the labor force from the means of production. This approach leads to a rational, positive bureaucracy that saves effort, time, makes everything better and more efficient.
The rationality, according to M. Weber, is important, but it is not the only prerequisite for the emergence of a bureaucratic organization. Such a role is played by the mechanism of domination or power. Of course, it is a matter of using power and dominance for economic action, through which, in a peaceful, constructive way, those goals that are solved in other societies through military means to acquire additional labor, raw materials and capital are achieved in a destructive way.
Another important component of the bureaucratic organization is its formalization, ie its actions are outlined in the framework of the relevant rules and instructions. Thanks to their use it is possible to achieve uniformity and consistency in the actions of the subordinates, the continuity of the organization’s actions. As a guarantee of continuous and trouble-free operation, the respective administrative state is oriented towards servicing the internal company personnel and on the other as an external agent for servicing and customer relationship. All this is a guarantee to achieve optimization through formalization
Traditional and well-established organizational structures are not always suitable for the implementation of an organization’s structural management policy. In such cases, structural policy, like Google, is geared towards creating flexible, adaptable organizational forms. They are characterized by less regulation of the work of the governing bodies, greater decentralization of decision-making and increased responsibility of everyone in the organization for the overall results. Through these structures, the organization better adapts to changing conditions and more efficiently solves complex and difficult tasks. A characteristic feature of these types of structures is that they are usually of a temporary nature, temporary management bodies and are created on a specific occasion (for example, the implementation of a project, program or task). These structures are called by different names – design, matrix, program-target, project-matrix, and others. One commonly used structure is a matrix structure. Its name stems from the fact that its guide lines are in both vertical and horizontal directions.
Organizational structures constructed on a linear basis, such as Weber’s principle, tend to have centralized decision-making, constant control over their implementation and strict discipline. Matrix structures have a mainly problem-oriented nature, with the horizontal lines of information dominating. Hierarchical forms of organization are appropriate in established technological processes and relatively stable external conditions, and flexible organizational forms allow for rapid response to changes, are suitable for changing external environments and require highly qualified staff.
The use of matrix organizational structures requires the coordinated efforts of various specialized departments and highly trained-personal. They are appropriate for the simultaneous solving of several complicated tasks that make up a project that requires a high degree of coordination in the process of its development and realization. Since in practice the matrix structures are usually used in the development of different projects, they are also called design-matrices. A characteristic feature of the matrix structure is that its implementation does not require the removal of the existing structure. Another distinctive feature is the creation of temporary units to solve a particular task or develop a particular project or product. These temporary units may include specialists from the various units of the existing structure for as long as necessary. At the same time, these professionals perform their duties in the existing organizational units where they are constantly working. The newly created temporary units are headed by the president of the company. There is both a linear and a functional relationship between them. During the period in which the specialists work in the newly created temporary units, they are both subordinate to their direct line manager and the head of the temporary unit in which they are included. Matrix structures are an effective way to perform the tasks in a short time. However, their application may also lead to some difficulties. In order for their application to be effective, links need to be clarified both vertically and horizontally, specifying what will be done, by whom, how, and when.
The main advantage of the matrix structures is the high degree of coordination of the actions. They are an effective form that supports the process of forming and implementing the organization’s governance policy. Another important advantage is the high degree of organizational adaptation (adaptability) to changing conditions. This organizational form enables the manager of the temporary unit to devote more attention to solving the assigned task as it is released from a number of functions performed by the line managers.
In conclusion, Organizational Structures of Business Organization Management must be brought in constantly in line with changes in the overall management system as they are one of its main components. The organizational structure is the component in the management system through which the management process is realized. Therefore, the organizational structure as a component of the management system is very important for the effective functioning of the organization.
Weber’s principles for the bureaucratic organization could hardly be applied in practice, but it is still possible – for some types of organization or with regard to the assumption of responsibility by the individual heads of units and others.
That is why the problem of improving the organizational structures of business organization management has been and remains constantly changing entity.