Organizational Structure & Design

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Organization Structure

The Key to a Successful Learning Environment is Structure

Architecture does not create extraordinary organizations by collecting extraordinary people. It does so by enabling very ordinary people to perform in extraordinary ways.

The first thing that comes to one’s mind when anyone thinks of an organization is its structure. This structure gives a visible identity to an organization and enables people within and outside the organization to ascertain how the organization operates.

It clarifies the techniques of how activities are to be executed to achieve goals and ensure future growth. It outlines the hierarchy within an organization by identifying each role, its function and responsibilities, and where each job fits within the organization, i.e. who reports to whom.

What is Organization Structure?

Organization Structure primarily facilitates any organization to transact their day-to-day work. It deals with various functions within the organization, the inter-relationship between the functions, departmentalization, and the delineation of different roles, how the jobs have been designed and the hierarchical relationship between them. Covid-19 has made it difficult to forecast the shifting nature of organisational structures. It has made organisations operate in a difficult environment of heightened complexity, acute uncertainty, and sharp volatility.

In the long term, this scenario is unlikely. To survive, organisations have to become more agile, quick-to-response, and flexible — while following a hybrid strategy. The more authority employees have, the higher up they’ll be on the organizational structure and the more organized a structure is, the more efficiently a company operates.

Benefits

At Naman, we realize the crucial role played by the organization structure in meeting its business purpose. A well-structured organization not only ensures smooth and effective operations, but also achieves optimum utilization of resources, seamlessly. Needless to mention that an insightfully designed structure helps in:

Creating cogently conceived roles ensuring functional autonomy, while promoting team working
Reduces/avoids crisscross of responsibilities with improved productivity
Higher growth opportunities
Optimally manning for achieving the desired goals
Unity of command and effective communication
Improve decision making
Improve employee performance

Types of organisational structure

Three types of organizational structures are used by most organizations today: Functional, Divisional and Matrix. Each of these types has pros and cons that one must consider before deciding which one to implement for their business.

Functional structure:
This structure helps the organization to group each department according to its purpose. It is followed by small businesses as each department can depend on the skills and knowledge of its employees. One of its drawbacks is a lack of communication. As there are various departments, communication can be restricted by organizational boundaries.
Divisional structure:
Within an organization, there are various products and different geographies. This structure is used to maintain the necessary resources and functions within each division to support the product line and geography. It benefits the large organizations in independent operation flow as a failure of one company won’t affect the other company.
Matrix structure:
This is a hybrid of divisional and functional structures. This structure is used in large multinational companies, for all the benefits of functional and divisional structures to exist in one organization. This can create power struggles because most areas of the company will have a dual management – a functional manager and a product or divisional manager working at the same level and covering some of the same managerial territories.

Principles of Organizational structure

Organizational structure is the framework of an organization through which individual work can be effectively arranged and organized. A good organizational structure should be developed based on the following principles:

Specialization:
It facilitates the division of work into units for efficient performance. Work can be performed better with the application of knowledge and improves the efficiency of the organization.
Coordination:
It refers to developing the objectives and activities of specialized departments to design strategic objectives of the organization.
Decentralization and Centralization:
De-centralization refers to decision making at lower levels in the hierarchy of authority. In contrast, decision making at a higher level is centralization. The degree of centralization and decentralization depends on the number of levels of hierarchy, degree of coordination, specialization and span of control. Every organizational structure contains both decentralization and centralization, but to varying degrees. The extent of this can be determined by identifying how much of the decision making is concentrated at the top and how much is delegated to lower levels. Modern organizational structures show a strong tendency towards decentralization.

Naman’s Organization Structure Framework

To us, the structure provides the edifice to any business organization and in the process enables it to achieve business results by delineating the workflow. For us, structure proves to be a key component for any organization in achieving business results by delineating the workflow. We, therefore, believe in understanding the purpose for which the organization has been formed, the market in which it operates, the stakeholders it needs to serve, its goals and aspirations and above all its belief system. This is ensured by creating a uniquely crafted approach that helps organizations sustain growth and success.

Organization Design

Organizational design choices can develop distinct competitive advantages. It helps to understand how the rules work, implement a few changes on a smaller scale and watch their effects before implementing them across the organization.

Companies with taller and complicated organizational structures can find it tough to adapt to changing market conditions, such as the growing use of lean business models or outsourcing in the industry. Companies with less complex organizational structures can find it simpler to shift employees around, revise managerial structures and redesign job descriptions for existing employees, all of which can increase efficiency or productivity in response to outside pressures.

Creating a strong architecture for your organization that enables you to operate seamlessly and effectively is central to Naman’s approach to structuring. We seek to achieve this by identifying the value chain for your organization and co-creating the structure by re-engineering the business process, along the value chain. This helps in achieving comprehensive and cost-effective coverage of all business deliveries to ensure the achievement of desired results while optimizing the organization’s manpower requirement. As the structure is based on the value chain that has been identified/created, both operational and strategic purposes of the organization are achieved. The re-engineered process results in ensuring functional integrity and autonomy, as much as evolving robust and meaty roles.

Job Design

Positions are required to be carefully crafted to fulfil the roles and responsibilities of different wings and functions of the organization. This leads to the identification of unique positions and the boundary limits within which it needs to operate. The unique position, accordingly, entails skillfully designing the job, its content, context and deliverables, fundamental to the construct of the job description.

It is a continuous and ever-evolving process that is aimed at helping employees make adjustments to the changes in the work environment. The end goal is reducing dissatisfaction, enhancing motivation and employee engagement at the workplace.

Naman over time has acquired immense expertise in designing jobs while ensuring non-duplication or overlap or absence of any activity, germane to effective performance. Our skill exists in our ability in role mapping to obtain seamless inter-relationship of any function and in turn the organization. This provides comprehensive and concise data for penning job descriptions.

Our Approach

Stage 1

Appreciation

Understanding the existing situation, the way organization functions and insights on the organization as a whole is ascertained through series of discussion. Discussion with the leadership team in knowing the organization’s plans and goals as much as achievements and challenges are critical.
Stage 2

Diagnose

The fund of data obtained is systematically documented and analyzed to help draw cogent inferences on what is working well and what needs to be fixed. Deeper scrutiny of the absence of functions/departments crucial to the achievement of both operational and strategic objectives is conducted. Similarly, the stock is taken of non-value-adding activities, roles and functions.

The data is then systematically documented and analysed to draw cogent inferences to understand and finalise a plan. Deeper scrutiny is conducted to know the achievement of both operational and strategic objectives as well as non-value adding activities, roles and functions that will help in forming a strong strategy.
Stage 3

Develop Options

Various strategic interventions are evolved applying time-tested principles of organization structure. These alternatives are evaluated for relative advantage and disadvantage by keeping best practices in mind.
Stage 4

Recommend Best Fit

An optimal structure is recommended which best suits the organization’s states and unstated needs. This is an outcome basis of our series of discussions with the organization, keeping the ideal and pragmatic options into consideration.
Stage 5

Implementation

We handhold the organization in operationalizing the recommended structure. This may include the population of the organization chart with the right internal and external talent. We believe in ensuring that the recommended structure enables you to derive the dividends of the new structure by resolving along with you the teething troubles and evolving remedial solutions.