![]() The key to profitable performance is the extent to which four business elements are aligned: The importance of aligning the structure with the business strategy Declining workforce engagement can reduce retention, decrease customer loyalty and limit organizational performance and stakeholder value.Ultimately, diminished capacity and lagging response times affect an organization's ability to remain competitive. With resources cut to the bone, however, most organizations' staff members can focus only on their immediate responsibilities, leaving little time, energy or desire to work outside their current job scope. Agile organizations can rapidly deploy people to address shifting business needs. Disorganization and improper staffing can affect a company's cost structure, cash flow and ability to deliver goods or services.Diminished capacity, capability and agility issues can arise when a) lower-level employees who step in when middle management is eliminated are ill-equipped to perform the required duties and b) when higher-level executives must take on more tactical responsibilities, minimizing the value of their leadership skills.Structural gaps in roles, work processes, accountabilities and critical information flows can occur when companies eliminate middle management levels without eliminating the work, forcing employees to take on additional responsibilities.Poorly conceived reorganizations may create significant problems, including the following: ![]() Rapid reorganization of business units, divisions or functions can lead to ineffective, misaligned organizational structures that do not support the business. Problems created by a misaligned organizational structure Organizational realignment involves closing the structural gaps impeding organizational performance. To ensure long-term viability, an organization must adjust its structure to fit new economic realities without diminishing core capabilities and competitive differentiation. See Inside Day 1: How Amazon Uses Agile Team Structures and Adaptive Practices to Innovate on Behalf of Customers.Ī hallmark of a well-aligned organization is its ability to adapt and realign as needed. As companies continue to evolve and increase their global presence, future organizations may embody a fluid, free-forming organization, member ownership and an entrepreneurial approach among all members. Today, organizational structures are changing swiftly-from virtual organizations to other flexible structures. In the 20th century, General Motors pioneered a revolutionary organizational design in which each major division made its own cars. Frederick Taylor's scientific management theory optimized the way tasks were performed, so workers performed only one task in the most efficient way. In the Industrial Revolution, individuals were organized to add parts to the manufacture of the product moving down the assembly line. ![]() Organizational structures have evolved since the 1800s. Less traditional structures are more loosely woven and flexible, with the ability to respond quickly to changing business environments. Traditional organizational structures tend to be more formalized-with employees grouped by function (such as finance or operations), region or product line. It allows groups to work together within their individual functions to manage tasks. Organizational structure is the method by which work flows through an organization.
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