Management Resource Library
Brady & Associates
Function Follows Form
Does your organization's structure impede performance?
When was the last time you took a hard look at your organization chart? Structure is a key element in defining any organization's effectiveness. We are not referring to the physical structure of the space it occupies. We are talking about the reporting relationships that exist among people, functions, and departments as reflected in the organization chart.
There are a few fundamental elements to consider when evaluating your organization's structure:
- Authority can be delegated. Responsibility cannot.
- To optimize effectiveness, decisions should be made at the lowest reasonable level in the organizational hierarchy consistent with capability and accountability.
- Authority to perform management cycle functions (planning, organizing, direction and controlling) and performance expectations should be clearly and appropriately defined at each management level.
- Overspecialization is the enemy of organizational effectiveness.
- The "Span of Control" principle should be observed:
- Ideally, a manager should be responsible for six to eight key result areas. This does NOT mean that a manager should only have six to eight direct reports. One manager can surpervise many people if they share the same responsibilities or work to perform the same service.
- A key result area may not involve the direct supervision of people. Instead, critical functions are the key result areas. For example, assuring that regulatory requirements are met can be a key result area.
- As a general rule, flatter is better when it comes to organizational structure. However, care should be taken to assure that there are neither too few nor too many management layers. Too few layers of management can create span of control issues. Too many layers will limit organizatinoal responsiveness, complicate communication, and facilitate information silo development. Two layers of management between the organization's CEO and working staff is ideal. Four layers between the top and bottom is almost always too many.
If significant time has passed since your organization chart has been evaluated, there is no time like the present. Developing a structure that observes these principles can have a profound impact on organizational effectiveness.
© 1990-2010 Frank J. Brady & Associates, Inc.