Formal and Informal Power Structures

Currently, there are both formal and informal power structures within Riordan Manufacturing. Its formal authority structure lies in legitimate power where control and the use of organizational resources are accepted. The structure of legitimate power is displayed by Riordan's organizational chart where the formal power begins with the highest person in the company, the president and CEO. The informal power structure comes from expert power as shown by Riordan Manufacturing's organization into separate departments that are managed by those with specific expertise.

The power and political structure of Riordan Manufacturing affects employee behavior due to the interaction between levels of hierarchy. This creates a need for employees to leverage their power and political influence in order to reach their goals or a desired outcome. Employees will behave in a structured manner because of the formal power structure in place. However, with employee satisfaction and performance will be positively related to the informal, or expert, power of those in management positions.

The most appropriate and effective organizational structure to help Riordan Manufacturing accomplish its goals would be a bureaucracy. With a bureaucracy there is very formalized rules, chain of command decision making, and tasks grouped into functional departments. According to Riordan Manufacturing’s intranet site, they not only have four locations, one of which is overseas in China, but employs over five hundred people who are all expected to use the new customer management system. Thus, the bureaucratic organizational structure will allow Riordan to standardize its processes across all levels of hierarchy in an efficient manner. This means minimum duplication of personnel and equipment with standardized operations.