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
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.
