Adaptive Organisational Structures (DP IB Business Management) : Revision Note
The Impact of Changing External Factors on Structure
When there is a change in external factors (market conditions, technology advancements, or changes in legislation), businesses may need to reassess their current structure
An adaptive organisation will be able to change their structure in response to external factors, or build an organisational structure which is easily able to handle external changes
Evaluating Organisational Structures in the face of Uncertainty
External Factor | Explanation |
|---|---|
Market Uncertainty |
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Rapid Technological Advancements |
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Global Expansion |
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Competitive Pressures |
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The appropriateness of an organisational structure depends on the context and unique characteristics of each business
Factors such as organisational culture, leadership style and employee capabilities should also be taken into account when selecting and implementing a new organisational structure
Charles Handy's Shamrock Organisation
What is a Shamrock Organisation?
A way of organising workers, created by Charles Handy in 1989.
Handy compared an organisation's workers to the three leaves of a shamrock (a three-leafed plant).
Each "leaf" is a different type of worker managed and rewarded in a specific way.
Handy believed that having a mix of workers on short-term or flexible contracts was better and more human-friendly than traditional, permanent jobs
Diagram: Handy's Shamrock Organisation
Core workers
Includes managers, technicians, and skilled professionals
Essential for achieving the organisation’s main goals
Usually employed long-term and paid according to how well the organisation performs
Have a strong, direct relationship with the organisation
Contract workers
Self-employed or hired temporarily for specific projects
Payment is based on performance, not hours worked
Have flexibility but less job security because their roles are temporary
Often previously core or peripheral workers who now offer specialised services independently
Peripheral workers
The largest group, usually part-time or casual workers
Perform routine tasks requiring less skill
Paid based on time worked (hourly)
Job security and regular hours can vary based on the company's needs
Advantages and disadvantages of the Shamrock Model
Advantages | Disadvantages |
|---|---|
Flexible workforce: A business can quickly adjust staffing according to market demands and business needs | Job insecurity: Short-term contracts can make workers feel uncertain about their jobs, affecting motivation |
Lower costs: Using temporary or contract workers only when needed helps save money | Less loyalty: Temporary workers may not feel strongly connected to the organisation, reducing their dedication |
Higher productivity: Workers are happier with varied and flexible roles, leading to better performance | Communication problems: Managing and clearly communicating with different types of workers can be difficult, causing misunderstandings |
Specialised skills: Organisations can easily hire experts for short-term projects without permanent commitments | Skill shortages: Over-reliance on temporary staff can create skill gaps if permanent staff don't have needed skills |
Better resource use: Helps managers use staff effectively by aligning workers closely with business goals | Legal complexity: Employing different worker types involves complicated legal rules, increasing compliance risks |
How is the Shamrock Model useful?
It helps managers clearly understand different worker roles
It makes it easier to decide how to motivate and reward each type of worker
Allows managers to see which parts of the business need fewer resources or adjustments to improve efficiency
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