The better a structure is designed, the longer it can work without making radical changes. Provided that a structure is correctly formed, workers change but a structure does not undergo any radical changes. Such types of structures are designed as a result of deep realization of the essence of the organization and proper revision of the main processes. They manage the people - not people manage them. Such kind of structures help organizations a lot to fulfill the strategy, to manage ongoing processes efficiently, and most importantly, to benefit from the abilities of those people who work for it. These are the very three tasks, which a properly designed structure should serve.
While running an organization, it is not a good idea, of course, to revalue the role of the structure. It will not manage to make people either kinder or cleverer. But if a structure is designed in the right way, it will be able to use the abilities of the workers in a more effective way. A structure cannot make the strategy more active. However, it can eliminate any chances of implementing the strategy, however well-designed. A structure itself is not able to make a process sounder than it really is. Still, it can either make the process a lot slower or affect both the quality and the quantity of the product.
Three factors that the organizational structure most influences:
1. The quality and the terms of performing strategic decisions;
2. The speed and the productivity of the main processes taking place in an organization.
3. The level of the staff motivation and willingness to do their best at work.
Hence, the structure has the biggest influence on all of those factors.
Structure and Strategy
The role of the structure in the fulfillment of the strategy is enormous, and far more critical than any other systems of the management because of several reasons: the structure determines what issues the management team will concentrate on and what questions they will discuss. It also determines how much of their energy and time is spent on this. It is the structure that allocates their attention and efforts on different tasks and determines the amount of the resource spent on it. Actually, the importance of the task increases not because the management team emphasizes on the significance of it but when the appropriate changes occur in the structure.
As soon as a person responsible for the task is identified it means that the management’s attention becomes closer on this task. The higher a person responsible for the task is raised in the structure and the less he is responsible for frivolous tasks, the bigger the management’s concentration and attention becomes. Attention is one of the strategic resources. Since it is not limitless, it is essential what the attention is mainly directed on. Not how bold the line under the task in the documents introducing the strategy is, but how much of its time and resource an organization spends on various tasks in everyday life determines the priorities of these tasks.
The second plausible reason for which the structure is important in implementation of the strategy is strategic competences. This is the structure that determines in what sphere or concretely about what themes the competence will be accumulated in an organization: a subdivision formed on a particular region or function automatically starts accumulating knowledge about this region, functions or technology. The forming of the job which is addressed towards the product accelerates the process of knowledge accumulation about this product in an organization. Accordingly, if we are aware of those competences that we need to implement a strategy and take proper structural decisions, we speed up the process of the accumulation of the knowledge and this way make the strategy implementation easier.
The third reason that connects a structure with a strategy is the major competitive advantage. In order to create, develop and maintain competitive advantage, it is essential to make appropriate structural decisions. No matter how well we realize that our advantage should be the quality of our service - if we do not have a proper structure the quality will either never become a competitive advantage or will be extremely hard to keep. A price will never be an advantage without a properly designed structure. This is the same about any other competitive advantages if we plan to make it a long-term advantage.
If the structure is important to constantly allocate the attention of the management in the right direction; if it impacts on our knowledge which serves as an advantage over our rivals, as well as on our long-term competitive advantages, then what can be more important than a structure to implement a strategy? A well-designed organizational structure can maintain the management priorities, competences and a long-term competitive advantage even if the key people change.
Structure and Major Processes
Organizational structure tremendously impacts on the speed of processes occurring in the organization as well as the quality and the scales of the result, which is stipulated by several factors:
1. Coordination for accelerating processes is a number one factor. When people work in one and the same subdivision, the level of the coordination is very high for them. When subdivisions unite under one director, these subdivisions start to work more easily and productively. As a result, those groups who take active part in processes and among whom the process coordination is very important, they are well-disposed in the structure, the relationships between them are well-balanced and the processes develop much more quickly and effectively.
2. Parallel control has a huge impact on a result, quality and scales of the process. If interests are correctly allocated to organization units which take part in the processes, they start to control a performance of one another eliminating any chances of producing a low-quality product and this way they ensure a good and stable quality of a product along with service. For example, a person who sets a task and the one who fulfils this task represent different subordinations. A recipient will not agree to take a badly-set task and a distributor of the task will better control how well the task set by him is performed. Such kind of interest conflicts are deliberately provoked so that subdivisions could better control the process of the quality as well as the volume both of a product and service which they produce.
3. Completeness of Functions. Structure should ensure the proper existence of each function in the structure as well as the equipment of them with adequate resources, strength and power, which have a crucial influence on the development of the processes. Provided that any function which is vital for the process is either missing or is not strong and powerful enough to perform its role efficiently in the process - this fact, automatically, leads to deterioration, complication or, in the worst scenario, termination of the processes as well as of a quality and the capacity of the result.
When completeness of functions, well-allocated conflict of interests and co-ordination among the parts participating in the process much depend on a structure, what can be more important for the quality of a result and its capacity as well as for accelerating of important processes than a soundly designed organizational structure is?
Structure and Self-realization
Last but not least, structure extremely impacts on people’s performance at work for an organization’s well-being and prosperity, which could be reached with the following factors:
1. Clear responsibility is the biggest motivator for people at work. Provided that they are well aware of what they are supposed and expected to do for the organization and what kind of responsibilities they are supposed to undertake, determines how active, motivated and willing people are to achieve the desirable goal. Clear and distinct responsibilities stipulate people to work even if they are extremely discontent with working conditions, management and other circumstances. They do their best to carry out their responsibilities and only after this they start thinking to quit with a feeling that they have accomplished their mission. On the other hand, people with high salaries and good working conditions might as well quit because they do not understand what their roles are at work which finally leads to demotivation and low-performance causing the feeling of insufficient self-realization ultimately encouraging them to find a new job.
2. Power that the structure rewards its staff with has an effect on their motivation and self-realization. This is a structural role that defines its formal power. The bigger the power is, the stronger the desire and a sense of self-realization are. And the more power is appropriate to responsibility, the more motivated people are to solve the tasks in the most efficient way. On the other hand, insufficient power and its irrelevance to responsibility lead to demotivation and demoralization of the people and increase their motivation to find a new job.
3. Involvement of workers in the important decision making, the frequency of their communications with the upper management levels help the structure to impact on the level of the staff motivation and self-realization. Structural units and formats, particularly collegial structures and parallel groups, working groups and committees allow people to get involved in performing different tasks which help them to better demonstrate their expertise and competences. On one hand, as a result of this an organization manages to make better decisions, and, on the other hand, it improves the involvement and motivation of people, which finally increases their sense of self-realization.
Hence, a soundly designed structure makes people more involved in the processes at work, gives them distinct and clear roles and grants with appropriate power. Ultimately, no other factors can better affect the people’s motivation and self-realization in the most efficient manner and benefit from their abilities and skills for the prosperity and well-being of the organization than a structure can.
In sum, if you see that strategic tasks fail to be fulfilled and it takes the management a long time to motivate the staff to solve central tasks, as well as the processes become much slower and complicated bringing about unfavorable results; if you do not see a glint in their eyes and they get more and more demotivated to perform their everyday tasks, it signals that it is high time you revised substantially your organizational structure as it can hardly meet the present needs of the organization.
Read the articles by “Synergy Group” and design the structure of your organization in the most effective way in order to support the implementation of strategies, to accelerate processes and encourage people to use up their abilities for the prosperity and well-being of an organization.