7.8 Trends in Organizational Structure

Companies are constantly evolving their structures to stay competitive. Reengineering radically redesigns processes for better performance, while virtual corporations leverage networks of independent firms. These approaches streamline operations, reduce costs, and enhance flexibility.

Outsourcing lets businesses focus on core competencies, but requires careful planning. Emerging structures like matrix organizations and cross-functional teams promote collaboration and agility. These trends reflect a shift towards flatter, more adaptable organizations in today's fast-paced business environment.

Organizational Structure Trends

Reengineering for organizational improvement

Top images from around the web for Reengineering for organizational improvement

• 

  Business Process Reengineering – Wikipedia View original

  Is this image relevant?

• 

  File:Business Process Reengineering Cycle.svg - Wikimedia Commons View original

  Is this image relevant?

• 

  Business Process Reengineering - Wikipedia bahasa Indonesia, ensiklopedia bebas View original

  Is this image relevant?

• 

  Business Process Reengineering – Wikipedia View original

  Is this image relevant?

• 

  File:Business Process Reengineering Cycle.svg - Wikimedia Commons View original

  Is this image relevant?

1 of 3

Top images from around the web for Reengineering for organizational improvement

• 

  Business Process Reengineering – Wikipedia View original

  Is this image relevant?

• 

  File:Business Process Reengineering Cycle.svg - Wikimedia Commons View original

  Is this image relevant?

• 

  Business Process Reengineering - Wikipedia bahasa Indonesia, ensiklopedia bebas View original

  Is this image relevant?

• 

  Business Process Reengineering – Wikipedia View original

  Is this image relevant?

• 

  File:Business Process Reengineering Cycle.svg - Wikimedia Commons View original

  Is this image relevant?

1 of 3

• Radically redesigns business processes to achieve significant improvements in key performance measures (cost, quality, service, speed)
• Follows a structured approach:
  1. Identify processes needing improvement
  2. Analyze existing processes and identify inefficiencies
  3. Redesign processes to eliminate waste and optimize performance
  4. Implement redesigned processes and train employees
  5. Continuously monitor and improve reengineered processes
• Streamlines operations and reduces costs
• Improves quality and customer satisfaction (faster response times, increased flexibility)
• Enhances competitiveness in the market
• Promotes organizational agility through efficient processes and adaptable structures

Attributes of virtual corporations

• Networks of independent companies collaborating to achieve a common goal
  • Each company contributes its core competencies (specialized expertise, resources)
  • Information technology enables seamless communication and coordination among partners
• Flexible and adaptable to changing market conditions
• Shares resources and risks among partners
• Focuses on core competencies and outsources non-core activities
• Forms temporary alliances based on specific projects or opportunities
• Virtual teams: geographically dispersed individuals working together using communication technologies
  • Members from different organizations, functions, or cultures
  • Collaboration tools (video conferencing, instant messaging, shared workspaces) enable effective teamwork
• Benefits:
  • Access to diverse talent and expertise
  • Reduced travel costs and time
  • Increased productivity and faster decision-making
  • Improved work-life balance for team members
• Often utilizes a network organization structure for enhanced flexibility and resource sharing

Strategic considerations for outsourcing

• Focus on core competencies and outsource non-core activities
• Evaluate long-term costs and benefits
• Consider impact on quality, control, and intellectual property
• Assess risks and potential disruptions to the business
• Ensure alignment with overall business strategy and goals
• Best practices:
  • Clearly define scope and expectations
  • Select vendors based on expertise, reputation, and track record
  • Establish clear performance metrics and service level agreements (SLAs)
  • Maintain open communication and collaboration with outsourcing partners
  • Regularly monitor and evaluate performance of outsourced activities
  • Develop contingency plans for managing risks and disruptions
  • Foster a culture of continuous improvement and innovation in the outsourcing relationship
• Can lead to flattening hierarchies by reducing internal organizational layers

Emerging Organizational Structures

• Matrix structure: Combines functional and project-based reporting lines
• Cross-functional teams: Bring together employees from different departments to collaborate on specific projects or initiatives
• Holacracy: Self-organizing system that distributes authority and decision-making throughout the organization
• Decentralization: Pushes decision-making authority down to lower levels of the organization