This article provides an overview of the most common organisational models. But first we explain what the task of such models is: to bring about decisions.
The main task of organisations is to make decisions. Roles, hierarchies, processes - most elements of an organisation are used to make decisions. Of course, the decisions must also be implemented, but that is a different issue.
How decisions are made in organisations
In 1920, on Henry Ford's factory floor, the tasks were clearly divided: Decisions were made at the top, work was carried out at the bottom. There is exactly one reason why this understanding has changed so radically:
The density of information increased exponentially. In 1900 there were daily newspapers and telegrams. Then came the telephone, fax, e-mails, etc. In other words, more and more decisions have to be made in less and less time.
In hierarchical organisations, decisions can be made very quickly and consistently. But because decisions are only made "at the top", only a limited amount of information can be processed.
New forms of organisation have not emerged voluntarily or out of philanthropy. But because the processing capacity of hierarchical organisations could no longer keep up with the flood of information. Shown as a red dot where the green line intersects the red line. To the right of the dot, the organisation's head is smoking: it should decide more than it can.
New forms of organisation have therefore emerged. As different as they are called, their goal is always the same: to distribute decisions among employees in such a way that decisions are made quickly and with good quality.
Before discussing individual forms of organisation, the advantages and disadvantages of these two extreme forms, left and right, are explained here.
Left vs. right form
The advantages of one form are often the disadvantages of the other.
There are good reasons why the fire brigade is organised hierarchically: if everyone sat down in a circle and negotiated goals and roles before putting out the fire, the house would probably have burned down long ago. Wherever the ability to act quickly is required, hierarchy is unbeatable. Conversely, only employees who are passionate about the goal can really work towards it with vigour. This can't be solved with specifications: The more unclear the goal, the more likely the right form of organisation.
| Left: Hierarchical | Right: Flat | |
| Advantages | fast clear precise | differentiated adequate high information processing capacity |
| Disadvantages | The organisation is just as smart as the boss. Because all intelligence is at the top. Even the fastest and most intelligent people have limits | Defining a common focus takes an enormous amount of time. Responsibilities are much less clear, the organisation seems less manageable |
Overview of common organisational models
| Name | Brief description | Advantages and disadvantages | Sources |
|---|---|---|---|
| Hierarchy | Corresponds to the "left-wing" form of organisation. AKV are clearly regulated. | People can be replaced quickly because roles and tasks are clearly defined. Very effective if the goals are clear, not too complicated and do not change too quickly. | Goes back to Taylorism, Henry Ford perfected much of it |
| MBO | Management by Objective was an attempt to move a little to the right. The objectives decide. | Slightly more dynamic than hierarchies - but the worst thing for a company is when employees stubbornly stick to objectives. Breeds lots of "egons" - people who will do anything to achieve their goals (even if it hurts the organisation) | Handbook of Applied Psychology for Managers (Lippmann, 2018) |
| Democracy | In principle, the right form - but the framework is determined jointly. Decisions are made by the majority. | The operating system of choice for countries like Switzerland. Very sluggish, generates a lot of mediocrity - and endless discussions. | Levin, Weber (classical models), Frederic Laloux (sociocratic models) and Handbuch für Angewandte Psychologie für Führungskräfte (Lippmann, 2018) |
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