Organisational structures

For those of us who have spent time in the management space, one element which often seems to get overlooked is what structure we might use in putting an organisation together, and where we might go for some information?

A base level management text will lay out the seven basic types for us (Robbins, 1991):

• Hierarchical. This is like most typical organisation charts, structured as a pyramid, with the C-suite at the top with lines stretching down through middle management to frontline staff. The most common structure, and the most common chart. The dangers? Siloing.
• Functional. Similar to 1, but employees are organised based on specific skills and their company function. Engineers in engineering, etc. The dangers: siloing in functions. 
• Horizontal (flat).  Levels between upper management and frontline staff is minimised. Dangers: control, quality and consistency can be compromised during growth-spurts.
• Business Unit. (market-based, product-based, geographic). Allows a large company to work like several individual companies, and keeps entrepreneurship and the ability to tailor offers to suit the client group going. Dangers: control, quality and consistency can be compromised during growth-spurts.
• Matrix. The organisation chart looks like a grid. This allows for a quicker response to industry changes or customer needs as people are pulled into both functional and line groups, with greater independence, autonomy, and a is more tailored to suit client or projects. Dangers: can be confusing, as staff may answer to several managers.
• Team. employee grouped in, e.g. scrum teams or tiger teams. The aim is to disrupt hierarchies, and focus on problem-solving, co-operation, give away control. Aims to increase productivity and transparency, and reduce siloing. Dangers: clan culture, or inter-team competition instead of collaboration. 
• Network.  Sensemaking of geographically-diverse staff, focusing on relationships and open communication to increase flexibility and agility. Power and decision-making is devolved, collaboration encouraged. Dangers: hidden or assumed complexity, and a lack of clarity in decision-making.

Unsurprisingly there are some good books on organisational structures, but exactly which structure we might choose is difficult. A good place to start on narrowing down on possible organisational structures might be to have a conversation with a management consultant, if we know someone who has expertise in structures (such a consultant at the BCG, or McKinsey). 

If we don't know someone, then I would suggest that we read widely. A few suggestions for books to read include:

• Burton, R. M., Obel, B., & DeSanctis, G. (2011). Organizational Design: A Step-By-Step Approach (2nd ed.). Cambridge University Press. 
• Laloux, F., & Wilber, K. (2014). Reinventing organizations: A guide to creating organizations inspired by the next stage of human consciousness. Nelson Parker.
• Meyer, N. D. (2017). Principle-based Organizational Structure: a handbook to help you engineer entrepreneurial thinking and teamwork into organizations of any size. NDMA Publishing.
• Roberts, J. (2007). The modern firm: Organizational design for performance and growth. Oxford University Press.
• Vitez, O., & Baligh, H. H. (2011). Organization structures: theory and design, analysis and prescription (Information and Organization Design Series). Springer.

Sam

References:

Robbins, S. P. (1991). Management (3rd ed.). Prentice-Hall, Inc.