The disadvantage is that functions and effort may be duplicated. Companies with wider spans of control require fewer managers and are more efficient than companies with narrow spans of control, but if the span of control becomes too large, employees may not receive adequate leadership and support from their managers. These strategies often require input from your marketing, accounting, information technology, production and sales managers. An opposition often emerges between a business and a process orientation in decision making. One example of organizational structure leading to inefficiency might be an employee who has to go through seven levels of bosses and supervisors to get approval for a task, his or her work may stagnate for hours, if not days, waiting for approval. It encourages creativity: Because of a sense of belonging and high morale that a well-structured organization develops among employees and also because of clear-cut accountability, recognition of skill and appreciation for their contribution towards organizational growth, the employees develop their own initiative and a spirit of innovation and creativity.
Poor organizational structure can create a variety of problems, such as bloated management and poor communication. Since the authority and the extent of exercise of such authority is known, it develops a sense of independence among employees which in turn is highly morale boosting. If these requirements are clearly established and the yearly increments or the cost of living increments for each type of job are properly and clearly understood, then compensation administration policies are easier to implement. By creating an organizational structure that can review and adapt, a company can continually move forward toward meeting effectiveness goals. The temptation is to work the other way around, selecting the seemingly obvious candidates for key positions before those positions are fully defined. The often serious downfall is its complexity — effectively with two hierarchies, and with the added complexity of tensions between the two.
Each department will have a department head who will be responsible for the performance of his section. The good news is that companies can do better—much better. Imagine a huge industrial company that spends half its resources building cars and the other half scrapping the same cars. Tensions emerge when projects do not meet their objectives. Powerful technology-enabled solutions allow companies to engage hundreds of employees in the redesign effort in real time, while identifying the cost and other implications of possible changes. Low Productivity Productivity is a key metric for almost every business.
Morale diminishes in an atmosphere lacking strong values. The authors reduced this list to 27 functions for inclusion in the survey. Different organization structures have different benefits in different situations. In resolving one or several of these tensions, a particular structure emerges. One small but fast-growing enterprise-software player we know made some minor changes to senior roles and reporting as part of a recent organizational redesign. Professionalism suffers greatly in this type of workplace environment.
This combines both the best of both worlds to make an efficient organizational structure. The observation is that if the organization and its employees share a common culture the environment makes it easier to share common goals and to follow suitable procedures in achieving them. The truth is that the data managers use are often inaccurate or out of date. An outdated structure can result in unnecessary ambiguity and confusion and often a lack of accountability. However, after starting the process, it discovered to its embarrassment that its earlier information was inaccurate. However, the case studies showed that the primary drivers of change were internal to the organizations.
Some are limited to the monitoring function while others have a role to play in controlling projects. The more a job is broken down into small tasks, the more specialization is required by each individual worker. In some cases, these signs can be early indicators of significant problems that need to be addressed before causing financial disruption in the company. The facts are: the ship was slowly tilting, the captain waited a long time to order evacuation, the majority of the crew followed his command, and some crew members started evacuating on their own initiative. One company in the payments industry—beset by changing consumer habits, technology-led business models, and regulatory pressure—understood the importance of shifting mind-sets as part of its recent redesign.
Establish metrics that measure short- and long-term success Nobody would drive a car without a functioning speedometer, yet a surprising number of companies roll out an organizational redesign without any new or at least specially tailored performance metrics. Project managers push to implement as planned even if quality problems persist. Your sales director might be handling marketing, but your new org chart might show you need separate managers for those functions. Competition for talent ratchets up anxiety and risk, creating a domino effect, with groups poaching from one another to fill newly created gaps. The researchers argue that high performance within an organization leads to the birth of strong culture. How well employees and departments can communicate is another of the most important effects of organizational structure. There are side-issues to consider too.
The advantage can be efficiency and economies of scale where functional skills are paramount. Employee morale often relies heavily on a strong organizational structure. Even though a lot is going on, lack of coherence makes it a zero sum game and a failing company. Departments may be unwilling or unable to cooperate with each other, and workers within departments may not feel a sense of camaraderie. Some older ones might be relevant, but usually not the whole set. The purchasing department may want the financial manager to pay an authorized supplier.
This self-reinforcing dynamic can lead to fatal results — like this cruise ship tragedy. Using the earlier example of a company that wants to grow by acquiring new customers, the sale team is incentivized on customer retention, and therefore is self-serving rather than aligned with the business purpose. An interactive cascade one that allows two-way communication gives people an opportunity to ask questions and forces top leaders to explain the rationale for change and to spell out the impact of the new design in their own words, highlighting the things that really matter. What leaders need to think about Possible explanations for the disastrous evacuation include negative effects of steep hierarchies, which are characterized by large power disparities and rigid lines of command. Organizational structure determines the number of layers of management and how departments interact with one another.