Restructuring A La Carte
etwork organizations may be all the rage today, but they're not right for every agency or office, or for every task. Sometimes a plain old hierarchical bureaucracy works just as well. Some agencies might be best organized into geographical segments. Others might work best when sectioned into customer segments. Most organizations don't fit one category only-they mix elements of hierarchies and networks, centralized and decentralized management, functional stovepipes and integrated project teams. Here's a rundown of some organizational structures and their advantages and disadvantages, adapted from a list created by Jack Kondrasuk and John Lewison of the Society for Human Resource Management, a professional association based in Alexandria, Va.
- Functional structure. This is the standard federal structure. Agency personnel are divided up based on the functions they perform: budget, human resources, strategic planning, financial management, evaluation, policy formulation, legislative affairs, etc. This structure does a great job of standardizing processes within each function, but a poor job of facilitating coordination among the functions. Decision-making floats to the top of the organization, so that deputy secretaries wind up signing off on many routine decisions. On the positive side, the functional structure allows workers to hone their skills in their appointed area.
- Product or customer-based structure. In this structure, functional experts are pulled permanently into product or customer-based divisions. An example in the federal government is the Internal Revenue Service, where separate divisions have been formed to serve individual taxpayers, small businesses, large businesses and tax-exempt organizations. Each division has its own budget, human resources, policy formulation and strategic planning staffs. This kind of structure ensures that people focus their efforts on what's best for the product or customer, rather than their own function. The downside is duplication of effort. The IRS could find itself turning into four mini-IRSes, losing economies of scale for purchasing and other actions and losing consistency of decisions.
- Matrix or project-based structure. Functional and product experts join project teams to complete tasks. They belong to project teams as well as to "home base" functional organizations. The value of the matrix structure is in bringing people with widely varied skills together to quickly complete a project. A problem with matrixes is that people can find it confusing to have more than one boss. "When the function supervisor and the product supervisor require conflicting demands from the employee, the employee's stress level increases and performance may decrease," Kondrasuk and Lewison explain.
- Other network structures. Cellular structures are widely associated with networks. Cells are autonomous, self-organizing work groups that are free to join up with other cells as they see fit, typically when it suits their reason for existing. But lack of control is a key drawback. Hub-and-spoke networks operate much like the Nike shoe company, which coordinates the activities of suppliers, shoe manufacturers, transporters, marketers and sellers, without directly controlling any of those operations. Again, lack of control is a worry.
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