The Organizational Structure of Banking Sectors in Sri Lanka

 

A mechanistic organization is one that has a formal, hierarchical structure with clearly defined roles and responsibilities. It is highly structured and processes-oriented and is often contrasted with the organic organization that is much more flexible and adaptive.

The mechanistic organizational structure has been around for centuries and still remains popular today within certain kinds of organizations, for example in hospitals, banks, law firms, governments, and many types of educational facilities. (Bennett, 2023)

Chain of Command

In a mechanistic organization, each person within the organization has a clearly defined role to play and they report directly to their superior. There is no room for confusion or ambiguity; everyone knows exactly what is expected of them and who they are accountable to, and a strict chain of command is necessary.

Centralized Decision-Making

Because there is a distinct chain of command in place, decision-making within mechanistic organizations tends to be highly centralized. This means that all major decisions must go through the top levels of management before they can be put into action. It may seem limiting at first glance, but this top-down structure does have its advantages, allowing for better control over operations and more consistent results.

Fixed, Tall Structure

The structure of a typical mechanistic organization tends to be quite rigid, with each employee executing their assigned role with no room for deviation from the established protocols.

A fixed structure helps to ensure that all employees are working together towards the same goals, but it also means that there is little opportunity for innovative thinking or collaboration between departments, something that is (purposefully) lacking in mechanistic organizations.

Additionally, mechanistic organizations tend to have tall reporting hierarchies, meaning they have many layers of management and many levels of leadership.

Strict Reporting Hierarchy

Employees in a mechanistic organization will often report only to a single individual—their direct manager or supervisor—since having oganizational chart can sometimes lead to miscommunication and confusion of responsibilities, something you don't want in an organization then needs to adhere to strict controls.

NDB is a leading financial company which conduct their operation s in srilanka and the organizational structure of the company will impose a huge impact on the management of the human resource factor within the company, NDB ban is existing their branches all over the country and the human resource is the main factor that the company management should be focus, if the human resource is not managed accordingly the organizational structure will be totally distorted, organizational structure of an organization emphasize the outline of the company and the activities that the company will be directing to achieve the goals and objectives of the organization. According to the Hall (1997) organization will be considered the anatomy of the organization, providing a foundation on the organizational structure and the organizational structure will be affect the behavior of the organizational members too(Dalton et al., 1980). (ndbbank, 2017)

The impact of a particular organizational structure defines the role of the human resource department, or the hierarchy of the organization will denote the organizational structure, if there is a well-organized hierarchy within the organization it can be affect to the management of the employees within the organization simply if the work of the organization is divided according to a method it will make ease of managing the human resource of an organization. According to the NDB bank the human resource department got a wide role of organizing and maintains the human resource of the company up to the standards.

Advantage of Mechanistic Structure Organization

The primary benefit of a mechanistic organization is that it is structured and efficient. The top-down approach of a mechanistic model allows leaders to easily identify roles and tasks while clearly defining expectations for each employee.

This structure also helps streamline decision-making processes and keeps everyone on task, allowing businesses to achieve their goals in a timely and predictable manner.

Mechanistic organizations help to promote clear communication between management and staff members. With an established hierarchy in place, everyone knows who is responsible for what—and who to go to with any questions or concerns. This makes it easier for employees to stay informed and make sure they’re doing their jobs correctly.

A mechanistic structure also encourages team collaboration, as managers can accurately track progress and give feedback more often than in a more loosely structured organization.

Finally, mechanistic organizations encourage increased accountability from both employees and managers alike. Since roles in a mechanistic organization are clearly defined, it’s easy to pinpoint where mistakes are being made if something goes wrong—which makes it easier for businesses to identify areas that need improvement or areas where additional resources may be necessary.

Additionally, since every team member is held accountable for their role in the organization’s success or failure, a mechanistic structure can create a strong sense of responsibility among employees which can lead to higher performance from every individual on the team.

Disadvantages of Mechanistic Organizations

Mechanistic organizations often suffer from poor communication between its departments. This is because each department usually has its own distinct goals and objectives that may not align perfectly with those of other departments. (indeed, 2022)

If this is the case, it means that important information may not be shared between the various departments in a company, which could lead to misunderstandings or conflicts down the line. Furthermore, if ideas from different departments aren’t heard or considered when making decisions it could lead to missed opportunities for growth and innovation.

Another issue with mechanistic organizations is their lack of flexibility. Because these types of organizations rely on detailed roles and processes that need to be followed exactly as prescribed, any changes or adaptations must go through a lengthy approval process before being implemented. This can lead to delays in responding to customer needs or market changes, plus a host of other potential issues.

Referances

Bennett. (2023, 01 10). Onedirectory. Retrieved 04 28, 2023, from onedirectory: https://www.onedirectory.com/blog/mechanistic-organizations/

indeed. (2022). Retrieved 04 26, 2023, from https://www.indeed.com/career-advice/career-development/mechanistic-organization#:~:text=A%20mechanistic%20organization%20is%20an,of%20command%20manages%20business%20operations.

ndbbank. (2017). Retrieved 04 28, 2023, from https://www.ndbbank.com/annual-report/2017/management-discussion-and-analysis.humcap#:~:text=OUR%20APPROACH%20TO%20HUMAN%20CAPITAL%20MANAGEMENT&text=Employees%20are%20also%20governed%20by,conflicts%20of%20interest%20among%20others.