Chapter List

Changing Organisational Structures

The shift from manufacturing to service-based businesses that are heavily dependent on knowledge as a key differentiator, has resulted in organisations rethinking the structure(s) needed to deliver a more responsive and efficient service to their global customers, as well as maximising opportunities for organisational learning.

Traditionally, decisions about organisational structure related to choices such as:

• Should we organise around products, markets, or function?

• Should we organise globally, nationally, or regionally?

• Should we structure for efficiency and flexibility?

• Should we be centralised or de-centralised?

Up until the early 1980s, most large organisations were designed around the principles of Taylor s scientific model of management. A defining feature of organisational design was ensuring control through the managerial hierarchy. There was a clear demarcation between the role of managers and other employees, with responsibilities and accountabilities clearly mapped out. The role of managers, under the Taylorist model, was to ensure that others in the organisation were doing the right things, at the right time.

However large bureaucratic structures, based on command and control management, have proved to be less effective in today s ever-changing business world. Organisations have found that command and control structures: hinder decision-making, get in the way of creativity, are...