The History of Organizational Structure

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As an organization grows, it becomes increasingly difficult to allow it to function organically with individuals and groups making decisions as they see fit. The history of organizational structure has been an evolution from small companies where not much management was needed to larger entities run with top-down systems to flat organizational approaches that value input from all levels.

Naturally, the rigid and simplistic approaches to organizational structure tend to run into trouble, and companies increasingly think in terms of finding a balance between authority and autonomy.

History of Organizational Behavior

Organizational structure, or the ways that power and information are shared and distributed in an organization, has its roots in organizational behavior, or the ways that people work together in a collaborative group. People have been organizing their efforts and working together for as long as there have been cultures and societies and long before a scholar thought to study and write about these processes and interactions.

It's hard to imagine that organizational behaviors themselves have changed significantly over time, although modern theorists have influenced organizational behavior by defining and studying different approaches to group processes. In turn, organizations seeking to improve have turned toward these theoretical models for guidance and direction.

Theorists of Organizational Behavior

  • Adam Smith. In 1776, the father of modern capitalism wrote about organizational structure and division of labor. Management has different responsibilities than the rank and file, and these different levels of participation act symbiotically.

  • Max Weber and Frederick Winslow Taylor. These sociologists emphasized rational organizational structure, competence, goal setting and rewards in their study of organizational behavior. They stressed the human element and the ways that individual strengths can better an organization as a whole.

  • Abraham Maslow. The American psychologist writing during the 1950s and 1960s described a hierarchy of needs that individuals must satisfy to survive and thrive. These start with basic physical needs such as food and shelter and progress to a need for intimacy and finally for self-actualization, or creative expression. These relate to organizational behavior because individuals in organizations must have their basic needs met before they can make far-reaching, creative contributions.

History of Organizational Structure

In the United States, there was strong growth in the independent business sector after the Civil War. Like many startup business owners today, the entrepreneurs of this period just wanted to make their products and sell them rather than concerning themselves with the theory and mechanics of creating viable organizational structures.

However, as some of these small businesses evolved into larger entities, they found that they needed to impose some order and organization to streamline work, grow more efficient and make the most of their human resources.

Businesses began structuring themselves with different levels of management and hierarchies that placed rank-and-file workers at the bottom of the food chain. After World War II, however, many companies began discovering that they were more innovative and productive with flatter organizational structures that drew input from employees at all levels. Some companies erred on the side of too little structure, so many contemporary organizations are working to find an effective balance between management and worker autonomy.

History of Organizational Development

Organizational development is a field of organizational theory that started in the 1980s as a way to improve the odds of success for companies, especially those with flat organizational structures. This field focused on bringing out the best in human beings at all levels by focusing on values and ethics with an emphasis on working together toward shared goals and visions.

In 1996, leading professionals in the field developed a credo that expressed the objectives shared by theorists and practitioners, linking the personal growth of individuals within an organization to the overall well-being of the group as a whole.