Strategic Planning Process and Organizational Structure: Impacts, Confluence and Similarities
Leadership>Strategic Planning & Execution Organization design should start with corporate self-reflection: What is your sense of purpose? It also carries emotional weight, because it defines reporting relationships that people might love. ABSTRACT. This article aims to analyze the relationship between the strategic planning process and organizational structure in the reality of a complex. Abstract: The relationship between organisation structure and strategic planning has been discussed by numerous authors. However, empirical studies of this.
If your goal is to give the best customer service, you may decide to beef up your call center or customer service department, which means opening more positions. This constitutes an organizational change. Organizational Design Organizational design is the detailed articulation of organizational strategy. Design translates the goals and desires of business leaders into actual, tangible plans.
In a case where downsizing is the strategy, organizational design involves figuring out which positions or departments to trim. When introducing a new line of business, organizational design means figuring out who is responsible for the new business, how many positions should be opened and where in the reporting structure the new line belongs. Normally, businesses draft these changes into a formal organizational chart so that everyone involved can clearly understand the changes and how the business should operate.
Feasibility Architect Frank Lloyd Wright is famous for his design concepts in which he followed his principle, "Form follows function. Design does strategy's bidding. However, when constructing a building, sometimes architects, land surveyors and contractors discover unforeseen obstacles that require a revision of a building's design.
The same is true with organizations. For example, if restructuring or reducing a key department or position endangers a business's ability to deliver an important service, then leaders have to reconsider their design.
Similarly, some positions and departments may not be efficient or profitable, but may exist for regulatory compliance purposes.
Inventory In order for organizational changes to become truly effective, strategists and designers need valid, complete information. Business leaders should take a thorough inventory of all of the positions, departments, processes, tasks and functions currently in play before figuring out the best course of action. It may turn out that a business isn't growing or achieving because of inefficiencies or kinks in the current organizational structure; therefore, a restructuring strategy is the most cost-efficient method.
In order to attract and retain the best talent from this millennial pool, they have to step up their game and develop a compelling brand, a strategy, and ultimately a culture of innovation, collaboration, creativity, diversity and growth. These are big changes to any enterprise who historically may have cared more about the bottom line than employee development. CEOs must work with HR and marketing to not only redefine and redesign the external brand to appeal to a more demanding consumer base, but to job seekers who have the skillsets these evolving companies need to take them to the next level in this digital world.
Organizational Structure How a company is designed will naturally influence its corporate structure. The sole purpose of changing organizational design is to better reflect the more culturally diverse, collaborative environment of people who share ideas and information.
Traditional structures, however, can fail to capture this more modern design. Companies are developing new missions, new perspectives, and new processes. These can be difficult to articulate and even harder to depict.
Strategy First… Then Structure | Strategic Planning
More traditional structures, such as hierarchical, functional, divisional, and product, are no longer the only options. They have struggled to accurately model the new agile, customer- and employee-focused organization. Functional Structured Organizations The functional organization aims to group employees by the specific functions performed.
Common departments are organized by separating each area and managing them independent of the others. While this structure establishes clear roles, responsibilities and lines of command, a common consequence are silos, such as a finance department that rarely collaborates with IT. Silos are rarely a good thing.Understanding Organizational Strategies - Strategy and Structure relationship - #40
They discourage collaboration between departments. Ideas, data and knowledge are confined to that one department. This has a ripple effect of increasing costs and decreasing productivity as efforts and expenditures are duplicated across departments. Divisional and Product Structured Organizations Organizations who are structured by divisions or product lines can suffer from the same fate. Because the company is divided by specific division or product, each are operated as separate companies.
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Even though the company is organized and structured, ideas, processes, data, technology, and resources are rarely shared. Matrix Organizations An organization that has a matrix structure can do a better job at fostering cross-company teamwork than those divided by functions, divisions or products while still adhering to a distinct reporting architecture.
Relationship Between Organizational Strategy & Organization Design
Teams are created by bringing people together from different areas of the business. They may report horizontally and vertically and be part of a functional group while at the same time, serve on a specific team.
Silos are less of a problem, yet because employees may receive direction from different managers, there can be some confusion as to how to prioritize work. Many companies are opting for more flat, holacratic structures that represent the interconnected teams that form the corporate ecosystem.
These newer models allow organizations to be more flexible and appreciate the modern design.
Strategic workforce planning and organization design – Naomi Stanford
Flat Structures The flat structure generally consists of a small number of levels and a broad span of management at each of those levels. Every employee is given equal footing so decisions are made either in collaboration or autonomously. This gives employees the feeling they are contributing equally on projects and are therefore similarly valued. The flat structure is more ideal for smaller companies where employees are used to wearing many hats and working together on whatever needs to be accomplished.
As the company grows, the flat structure is more challenging to pull off.
The consequence of a more lax structure can slow decisions because they are made as a democracy with everyone having a say. Holacracy Structure A holacracy is perhaps the latest attempt at mapping the organization without a more formal structure. These more modern companies respect the creativity and shared knowledge of the flat organization but blend departments and roles so decisions can be made from anywhere by anyone.
Employees are organized around work, projects and objectives rather than divisions or products. This hybrid approach offers a bit of structure without the rigidity, while still giving employees the autonomy to work freely within that structure.
These more free-form structures have something in common: These teams may be comprised of people from many areas of the business, including sales, marketing, finance, legal, and IT. They focus on a specific challenge or project, contributing their knowledge base to solve the problem, bring a product or service to market, or manage a project through its entire lifecycle.
These employees may only work together as a team on a single project before disbanding and being pulled into a different project with an entirely new mix of people. With every employee collaborating on multiple projects across the enterprise and working in many different teams on a variety of tasks, how does an organization then designate a leader?
How is employee performance measured? How do employees grow and develop? How are resources planned, managed, and tracked?
These are questions the newly structured companies are facing and why it can be so challenging to put a pen to paper to draw out the relationships.
Without distinct job descriptions or reporting structures, the lines in the traditional organizational structure are blurred.