Creating Effective Organizational Structure

This is a brief note on an organization design project undertaken for a client organization in Africa some years ago. This note covers only a few aspects of the review of the organizational structure. The real name of the organization is not used. Besides, the schematic diagrams are not shown, and details of the review of the organizational structure and recommendations made to ABC Company are not included.

General Approach

Review of relevant documents, interview of top management executives and representative employees, preparation of relevant templates, process observation, panel discussions, data feedback and workshop presentations.

Basis for Review of the Organizational Structure

It is important that ABC be organized to conduct its business and meet its strategic challenges effectively and efficiently. There is no perfect organizational structure. ABC’s organizational structure is as good as its fit to the company’s strategic situation and competitive realities, and effectiveness for the level of responsiveness and business commitment the company wants.

Key Strengths in Current Organizational Structure

Headquarters Structure
Distinct governance by the Board of Directors ensures that the management of ABC are given proper direction.
Setting up key committees shows that the Board takes its corporate responsibility seriously and sends a clear signal to the management and staff of ABC that the Board is an actively involved in achieving ABC’s strategic and competitive mission.
The structure gives strong attention to the functions and specializations which form the mainstay of ABC's business.
Regional and Field Operations Structure
The structure enables ABC to integrate all specializations at regional and field levels.
The structure makes ABC responsive to local needs.
Decentralization of project decision-making with limited interference from HQ has the potential to reduce bureaucracy; it reduces delays and bottlenecks that may occur if the system is centralized.
Periodic regional and field operational engagement and feedback mechanism, and trouble-shooting visits where necessary, provide the opportunity for field operations’ staff to effectively focus on their performance and trust ABC’s staff performance management system.

Periodic regional and field operational engagement and feedback mechanism, and trouble-shooting visits where necessary, provide the opportunity for field operations’ staff to effectively focus on their performance and trust ABC’s staff performance management system.

Key Weaknesses in Current Organizational Structure

There are too many layers of roles and positions in ABC’s organizational structure. A tall organizational structure tends to create unnecessary bottlenecks for prompt decision making, particularly at the primary point of influence or need. This situation can also create a conflict in an organization, such as ABC, that uses teams a lot. Effective teamwork tends to be sustained better in a flat structure.
The nature of matrix organization being operated in regional and field operations apparently brings the worst problems associated with that form of organization. Dotted line relationship is assigned to purely technical direction and guidance while solid line relationship is for administrative and daily operations. This is a fundamental weakness.
The use of diverse reporting routes from the regional and field offices to the HQ, whereby field reports are sent to different contact points at the headquarters, bring operational and administrative difficulty for both the field operation and headquarters. Coordinated information, instruction, and directives would improve regional and field operations effectiveness. There should be one point to which field reports emanate at the field and received or coordinated at the headquarters.

Other Organization Design Details

Apart from recommended organizational structures for various departments and regional offices, re-alignment of functions and responsibilities in certain departments was also recommended. Job descriptions and performance indicators were prepared for some key positions, and an implementation plan was recommended