Why organizational structures matter
Organizational structure is what it is. It is a form. Although not physical, it is visible in the patterns of operation in every organization. Structures are so visible in their impact that experts have categorized them with many different descriptions that could depict physical structures. To this end, there are tall, flat, circular, fluid, rigid, flexible, organic, and mechanistic organizational structures. Even feminine and masculine organizational structures exist.
On a normal day, organizations would adopt a structure to help them achieve set organizational objectives. Some choose structures that pay attention to hierarchies and span of control while others choose to pay less attention to hierarchy as well as giving room to flexibility. Either way, the operational environment and rapid changes facilitated by globalization stand as a test of a good fit for organizational structures. The manager is constantly faced with the challenge of designing the structure of the organization in order to achieve its strategic intent. The truth is that no single organizational structure is best for all organizations.
Which organizational structure is best for you?
Would you like to be like Valve Corporation? Valve is a gaming company in the U.S. that adopts a radically flat structure. At Valve, everyone is a “CEO” and has the right to choose what to work on and who to work with. Here is a direct extract from Valve’s employee handbook “when you’re an entertainment company that’s spent the last decade going out of its way to recruit the most intelligent, innovative, talented people on Earth, telling them to sit at a desk and do what they’re told obliterates 99 percent of their value. We want innovators, and that means maintaining an environment where they’ll flourish. That’s why Valve is flat. It’s our shorthand way of saying that we don’t have any management, and nobody “reports to” anybody else.”
Actually, there is no particular structure that provides all the answers. Many organizations adopt a hybrid structure; making use of a combination of two or more types of structures to address their organizational challenges. However, certain structures best suit certain organizations as regards age, size of the organization, and nature of business. For instance, it is typical to find an individual performing multiple roles in a startup or small business. While this could be a result of a lack of enough manpower, it might not result in maximum productivity. Startups are best structured in a functional way. A functional organization is structured according to the primary business activities of the company. So, you have someone or people dedicated to selling products, others dedicated to product development, and some others to managing the human resources. Many companies adopt the functional structure because society itself is organized around these functional specialties.
In recent times, modern and forward-thinking organizations tend towards agile, organic, and flat structures which allows for flexibility, openness, initiatives, innovation, improved communication, and collaboration. Such organizations are quick to respond to changes in the operational environment because individuals are allowed the independence to make decisions regarding their work without many bureaucratic bottlenecks. Individuals do not however work in isolation but work as a group of interdependent teams. These structures do not totally do away with hierarchy and chain of command, but makes them less visible. This is the approach we adopt at Genesys Tech Hub.
An organizational structure is beyond the organogram drawn on paper, it is the backbone of every company. Whatever structure you decide to adopt should prioritize people, eliminate boundaries, and increase the organization’s ability to achieve strategic initiatives.
