I want to Change the Structure of my Organisation - How do I Go about Doing this?

Assess the Effectiveness of your Organisational Structure

Why is the Structure of your Organisation Important?

If your organisational structure is wrong:

What Types of Organisational Structures Exist?

Functional Structure (Bureaucratic Structure)

The traditional approach was to divide an organisation into functional areas such as marketing, production and finance. Each has many layers of hierarchy to reflect the distribution of responsibility and authority.

Features

Appropriate for single product firms or firms producing a clearly related group of products.

Disadvantages

Can be inflexible as there's an inability to change and meet new demands, e.g., IBM had a functional structure with a strict distinction between areas such as marketing and research and development until 1988. It was believed that this structure led to delays of up to two years in the introduction of new models and this caused IBM's profits to fall after 1984. IBM has now split up its product range into divisions, each with their own production, marketing etc. staff.

Structure by Product (Divisional Structure)

Today many companies have reduced the number of management layers and have re-organised away from functional structure towards a divisional structure. Within each division marketing, production and other staff would work together on the same projects.

The division of work may be by:

Features

Advantages

Disadvantages

Geographical Structure

As an organisation grows it sometimes needs to set up branches in other locations. It may wish to allow these branches to work as autonomous units, that means that they are like little organisations of there own making local decisions but guided by the policy decisions made at the head office. Many government departments work on this model.

Advantages

Disadvantages

The Matrix Structure

This is a systems approach organisational structure, where organisations are regarded as groups of inter-relating elements that require co-ordination and information to turn a wide range of inputs into a variety of outputs. This approach acknowledges the dynamic nature of business and recognises that static organisational structures are at times wholly inadequate for decision making.

In the matrix individuals have two or more managers, e.g., a sales manager will report to the marketing director and the product manager.

The more common application of the matrix approach involves organising projects along lines that cross normal departmental boundaries, involving people in some or all of the organisations departmental areas. In these situations people work together in a team to achieve their projects goals. A person working on a project would have two managers, the boss of the department that they work in and the leader or manager of the particular project that they are working on at the moment. When the projects are completed, these project groups are disbanded.

Advantages

Disadvantages

What do I Need to Consider when Assessing my Organisational Structure?

Size

As your business grows you will need to look at your changing needs.

Leadership Style

If you wish to retain control in the business, you will want a narrow span of control. If you wish to motivate employees you will need to set up a structure that delegates decision making to them.

Business Objectives

What are your goals, what is the best structure to achieve your goals?

External factors

Is there a lack of qualified people to employ? What are your competitors doing? What do your customers want? Have their needs changed?

Changes in Technology

What new technology is available? How will it impact on your business?

Get in Touch with Jump

If you need help, or you answered yes or unsure to any of the questions in the assessment tool, then Jump Business Solutions can help you. Phone us on +64 6 754 8987 or +64 27 450 5271 or email info@jump4biz.com and Jump will come to you, discover your needs, and develop a solution that will create real, long-term and positive change for you and your business.