Organizational Structure

It is important that an organization’s structure is built and revised as the company grows.

 

Here are some key things to address if examining your company’s organizational structure:

-          Formalization – refers to written rules, policies, procedures (formalization would be low in a start-up or small organization)

-          Centralization – how much decision-making authority is held at different levels

-          Complexity – refers to different job titles and departments in an organization

-          Specialization – extent to which a big task is broken into smaller steps or tasks.

 

How to determine the level of complexity required in the organization’s structure?

-          Define primary functions in the organization and consider the need for coordination between department

-          Specialization and department size required and whether a separate department is required or existing departments will take responsibility for the function (re-evaluate as the company grows and higher degree of complexity might be required)

-          Practical group exercise to evaluate the required complexity in a specific organization

 

Bases of Departmentation could include

-          Product or service departments – products or services can serve as a guide for creating departments

-          Territories – location could be the primary factor in defining and differentiating department responsibility (this is critical if the activities of an organization are dispersed over a wide area)

-          Functions – units are formed based on the functions that are carried out

-          Practical group exercise to define appropriate bases of departmentation in a specific organization

 

 

Pre-Workshop Materials:

 

Do You Have a Well-Designed Organization? By Michael Goold and Andrew Campbell

 

https://hbr.org/2002/03/do-you-have-a-well-designed-organization

 

For most companies, organization design is neither a science nor an art; it’s an oxymoron. Organizational structures rarely result from systematic, methodical planning. Rather, they evolve over time, in fits and starts, shaped more by politics than by policies…..

 

This outline was recommended by AllaVolodina who teaches in university and corporate settings. Alla developed a variety of workshop outlines, as well course outlines for various institutions (e.g. York University). Check out AllaVolodina blog for more articles: allavolodina.com.