Why do organizations change their structure?
The organization structure should reflect an entity’s business strategy, business model, and business objective. The business strategy, model, and objectives, in turn, are influenced by the competitive environment, technology, and customer need.
When the organization structure is aligned to the entity’s strategy, model and objective, it operates efficiently and can meet its goal.
A dynamic organization should review its strategy periodically and make shifts to it as the external dynamics change. Let me illustrate this with the example of the Indian IT company TCS.
As the company grew in size and competition grew, the company was forced to look at its strategy to keep its focus on its customers and enhance service delivery quality.
The company moved from the then prevailing structure of specialist groups and restructured itself into lines of business. Each line of business called Industry Practice was now made accountable for its profit and loss. An Industry practice now acquired specialist resources critical to service its customers. The individual specialist groups disappeared.
The restructuring brought increased customer focus and agility in service delivery. The new organizational structure helped the company move to the next cycle of growth and performance.
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When should I think of organization design in the business transformation journey?What is the relationship that exists between organizational structure and strategy?How do I make my business stand out amongst competitors?The post Why do organizations change their structure? appeared first on Sudhirahluwalia, Inc.
