Appropriate Vehicle for Organizations


KulTwit (Kuliah Twitter) @eclatconsulting May 23rd, 2014

  1. Organizational structure often described as a vehicle that will take the company to achieve its objectives
  2. In reality, the formation of an organization is more heavily influenced by political interests, as opposed toa systematic approach
  3. Sometimes, the organizational structure becomes a source of conflict between top management, it can even stagnate the implementation of its strategic program
  4. How to “feel” that the organizational structure of the company’s current or new organizational structure is already appropriate?
  5. Of course, “appropriate” can have multiple meanings
  6. “Appropriate” in the sense means that it could bring the company closer to its goal
  7. Michael Goold and Andrew Campbell develop two tests that can be used to test the suitability of the organizational structure in the company
  8. The first is the “Fit Test,” a test to see whether the current organizational structure supports the company’s strategy
  9. There are four questions that need to be addressed in this Fit Test
  10. First, is the organizational structure is sufficient in directing people’s attention to the company’s competitive edge?
  11. Second, is the organizational structure push the parent company to give an additional value to the company?
  12. Third, is the organizational structure illustrates the strengths, weaknesses and motivates employees?
  13. Fourth, is the organizational structure already consider all the challenges that will rise in the structure implementation?
  14. The second is the “Good Design Test,” to see whether the “design of” the current organizational structure has a good balance between empowerment and control
  15. There are five questions that need to be addressed in the Good Design Test
  16. First question, is the organizational structure consistent with the corporate culture?
  17. Second question, have the organizational structure considered the coordination mechanism in between organizational units?
  18. Third question, does the organizational structure have many parent-unit hierarchy?
  19. Fourth question, is the organizational structure promotes ineffective control?
  20. Fifth, can the organizational structure accommodate changes and new strategies?
  21. Source: Harvard Business Review, éclat Consulting

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