Organisation Change

When a group of people comes together to achieve the output, the concept of organization is born. To produce the desired output, people with specialization in various kinds of work participate. The method by which work flows across the organization is called organizational structure.

Various kinds of work have a logical grouping called functions or departments. It enables a group of people who specialize in particular work to work together and manage their tasks in that function or department. Some organizations have a very formalized organization structure wherein grouping by function, region, or product line is very tight. Some organizations have a loose organization structure to ensure flexibility and agility.

Over the period, with changing business environment, organizations develop a gap in their organization structure. The organization structure doesn’t support their strategy in responding to the changing situation. Organizations that build capability to re-align their organization structure quickly as demanded by their strategy can execute the strategy in a better way and create long-term value.

If organization structure is not up to mark, then below problems an organization can face:

1. The additional load of work on employees at all the levels
2. Blockage of the leadership pipeline and leadership responsibilities of leaders getting hampered by operational activities
3. Losing competitive advantage owing to reduced response time
4. Severe impact on various financial indicators
5. Reduce the level of employee engagement and rising level of attrition

Six elements of Organization Structure:

1. Work specialization refers to divide entire work or tasks into different jobs.
2. Departmentalization is the basis of a grouping of divided jobs as per their category.  
3. Chain of command clarifies the reporting relationships. It enables employees to understand to whom they are responsible for reporting.
4. Span of control defines the number of employees a manager can handle efficiently and effectively.
5. Centralization and decentralization are the degrees to which decision-making is concentrated at the organization’s signal point.
6. Formalization defines up to what degree jobs within the organization are organized or standardized.

  Types of organization structure:

1. In simple structure, there is low departmentalization, the largest span of control, high centralization, and very little formalization.
2. In a functional structure, the organization is departmentalized into multiple functions wherein the grouping of specialties is introduced.
3. In a divisional structure, the organization is divided into various divisions or business units.
4. In a team structure, the whole organization is divided into multiple workgroups or teams.
5. In matrix organizations, the functional specialists are pooled in to work on projects led by project managers.
6. The Hybrid Structure combines both functional and divisional structures.
7. Boundaryless organizations mean eliminating or minimizing vertical and horizontal boundaries.

CUNIX Inspire offers below consulting solutions for designing organization structure:

1. Design for success (DFS) – This offering focuses on developing organization structures aligned with strategy.

2. Work on Fundamentals (WOF) – Workshop on type of organization and how to design your organization structure.  

3. Designing self-organizing organizations (DSOO) – Self-organizing organizations are very different in design and the way they operate. Knowledge transfer and handholding on how to create a self-organizing organization.