I was recently going through a very interesting White Paper about Organizational Structure written by Richard Kibble & Neal H. Kissel of Marakon Associates, which presents a very different notion about the parameters based on which a business should form its Organizational Structure.
As per Kibble and Kissel, an enterprises’ structure defines its strategy rather than the other way round. Flexible organizational structures leads to flexible strategies and better Global/Local Structures Produce Better Global/Local Strategies. Thus, better organizational structures lead to better strategies being formed and implemented successfully. This is because organizational structures greatly affects a manager’s management style.
Structure critically affects managersâ€™ decisions and, in turn, influences their emergent strategies. Managers with unique talents emerge when the organizational structure allows them to refine and perfect their craft.
Better structures provide the an ideal platform for grooming young talent; allowing them to interact with various organizational demands and scenarios, in turn, creating better managers.
If you want to develop more managers who can manage for value, create a lot of opportunities for them to manage for value. Managers with unique talents for discovering and developing new customer groups – or creating and executing new strategies – donâ€™t emerge by chance. They emerge because thereâ€™s an organizational structure in place that allows them – and challenges them – to refine and perfect their craft.
In short, organizational structure greatly influences the way managers function and make decisions. Hence it should be always be designed to exploit the uniqueness of the business with regards to its markets, products and more importantly, its people.
To sum it all, if you want to have a distinctive strategy to outperform the competition, you need have a distinctive structure!