Organisational Structure – The Core of Managing Goals

On Dec 29, 2021, Toyota Kirloskar Motor (TKM) announced changes in its organisational structure. According to The Economic Times, the automaker issued the following statement:

“Toyota Kirloskar Motor (TKM) announced organisational changes with effect from January 1, 2022. Key resources have been aligned and assigned responsibilities in a way, so as to drive synergy and efficiency throughout the organisation.”

TKM is not the only one. Some of the country’s biggest biz houses, namely, L&T, Wipro, Infosys, Godrej, Birla, and Tata are also focusing on organisational restructuring, reports the same news source.

All these billion-dollar companies have risen remarkably well to the challenges thrown by the market every time, proving that they have the ability to cope. Then, why restructure?

Significance of organisational structure

• Clearly defined roles and responsibilities:

  An organisation with clearly defined roles and responsibilities has the twin advantage of avoiding both duplication of work and conflict among employees.

• Goal alignment:

  A well-structured organisation has “checks and balances” to continually evaluate progress. This makes taking a corrective course easy when and where necessary. It, thus, creates an atmosphere favourable to achieving common business objectives.

• Increased productivity:

  A good org structure ensures the best role-job fit. Identifying the right employees for a required role and delegating work with clear-cut instructions make employees perform better, which, in turn, increases the productivity of the organisation.

• Greater efficiency:

Since organisational structures divide responsibilities among divisions and teams, every individual can focus better on his or her core tasks and operate more efficiently, making the flow of work smooth.

• Better communication:

  Organisational hierarchy fosters better communication between divisions and within the team since the reporting hierarchy is clearly established. For instance, when employees need clarification about a task or feel the need to voice a grievance, they know whom to contact.

• Better decision-making:

  When teams within an organisation communicate effectively, information flows more fluidly. This promotes faster decision-making and has a positive impact on the organisation’s communication as a whole.

• Enhanced creativity:

  A good org structure inspires high morale among individuals, encouraging them to take initiative. It also helps enhance their creativity.

• Upscaled business:

  Customers are the focus of all businesses. With a good org structure, a company can have effective feedback collection mechanisms that allow it to constantly improve, thereby facilitating an increase in its customer base.

Lack of a good org structure can jolt your business

Many unwanted situations, deterrents to a company’s overall health, can be prevented by having the right organisational structure. Issues such as confusion within roles, lack of coordination among functions, failure to share ideas and slow decision-making leading to stress and conflict, all of which hamper an organisation’s growth, can be avoided. All businesses, whether a large enterprise, small business or a non-profit, need an organisational structure. There is no one-size-fits-all structure. Business owners must select the model that best suits their organisational needs. There is no dearth of variety — functional, matrix, flat, hierarchical and many more.

Conclusion

Managing a business is no mean task. It takes up a lot of a business owner’s time and energy, pulling him/her in various directions. Now, more than ever, it is important to stay relevant and adapt business practices to the changing work scenario. Having a good organisational structure can relieve some of the business owner’s burdens by making a company run itself on a daily basis. This frees up top management’s time and energy for driving bigger decisions and propelling the company to greater heights.