The organizational structure of a business is the framework that facilitates communications and efficient work processes. When business problems emerge, signs often exist within the design or components of the organizational structure. In some cases, these signs can be early indicators of significant problems that need to be addressed before causing financial disruption in the company.
Slow Decision Making
Slow decisions can hamper sales opportunities and innovation. If an organizational structure is not optimized to direct decision making authority to the appropriate person, or must travel through multiple layers of management before a result is rendered, the organizational structure may need to be changed. A leaner or departmental decision-making process may be needed to foster an innovative spirit in the company.
Lines of Communication Unclear
Employees routinely bypassing the standard chain of command in a company could be a sign of poor organizational design. Employees with complaints or suggestions should typically provide feedback to their manager or occasionally to their manager’s boss. In an optimal business, employees should feel their voices are heard through the standard management path. In an organization with a poor structure, employees may feel the need to go directly to a department head, vice president or even the president to express concerns or recommendations.
A lack of collaboration between departments or organizational sections can lead to paralyzing territorialism in a company. When managers or employees feel the need to protect the interests of their department over the overall needs of the company, the business may suffer. This organizational structure rift can often be seen through budget and employee resource disagreements.
Poor organizational structure can cause an unequal distribution of work between departments or divisions. When some areas of a company are routinely understaffed and work overtime to meet workload requirements, while other areas struggle to find sufficient work to keep every employee busy, the organizational structure has not been optimized for business requirements.
Productivity is a key metric for almost every business. Low productivity levels can indicate a problem in an organization’s structure. Through inefficient resource allocation, poor vertical communication and employee empowerment constraints, employees may not have the proper environment to complete their work assignments in an efficient manner.