Organizational Behavior and Culture in Business Operations

Organizational structure and culture are becoming critical elements that businesses need not only to generate profits but simply to survive. Due in part to rapid technological change, many businesses are undergoing fundamental shifts in their operating models. No industry is immune to these changes. Trends are currently emerging around big data, data analytics, cloud computing, artificial intelligence, automation, and more (Halpin, 2018). Many tasks once considered essential are now becoming routine and automated. These innovations, though welcome from the consumer's perspective, bring a litany of challenges related to organizational structure (Bhambri, 2018). Those challenges center on how to properly leverage emerging technologies in a manner that improves corporate performance while also creating a strong competitive advantage. To accomplish both goals, organizational structure and culture must be adapted (Abernethy, 2018).

Organizational structure is the system of processes and procedures used by businesses to accomplish a predetermined task or goal. These structures often vary from company to company, each with its own strengths and weaknesses. As noted above, technology is heavily disrupting industries irrespective of market position. The rapid pace of change in the business climate, combined with the dynamic nature of technological evolution, can help or harm particular organizational structures (Eccles, 2018).

For example, the most common organizational structure found in older organizations is the bureaucracy. A bureaucracy is characterized by a complex system of layers and processes that govern activities within an organization (Carzo, 2019). This form of structure was well-suited to industries that experienced little or no change in their core operations, and it was popularized during the Industrial Revolution. During that period, although innovations were occurring, the structural framework required to adopt them remained largely the same. Changes were not as rapid, and organizations could implement them slowly once they were determined to be successful.

The railroad industry, for example, was heavily characterized by bureaucracy (Blankenship, 2018). Once track was laid, it was very difficult for competitors to contest a specific route — government regulation prevented it, and the high capital expenditures required deterred new market entrants. As a result, certain railroads accumulated near-monopolies in specific regions of the United States. That regional dominance persists today: CSX dominates the southeastern railroad sector, Burlington Northern Santa Fe dominates the Midwest and West, and Canadian Pacific dominates the South. Due in part to limited competition, strong market positions, and entrenched operations, railroads typically operate under a bureaucratic structure (Cheney, 2018). Changes must be approved through multiple layers of review and oversight to avoid major disruptions and ill-advised decisions. Once approved, changes are implemented slowly to ensure minimal disruption to business operations or customers. This is the preferred system because the railroad industry occupies an entrenched position that evolves slowly — changes can be anticipated well in advance, and adjustments can be made deliberately. Consequently, operations do not require a decentralized structure. A well-defined chain of command works best, as positions and authority are clearly delineated (Abramson, 2019).