Most experts agree that a bureaucratic organisation is detrimental to
growth and expansion in the long run as it kills innovation and ties up
management from making strategic decisions. FILE
By Cathy Mputhia
A lot of focus is given to the financial and
human resource pillars of a business, often overlooking the
organisational structure.
The organisational structure is all the layers of management that affect a firm’s flow of ideas and information amongst others.
Different organisations have different types of
structures, with some favouring a flatter structure and others favouring
a more complex structure. Research has shown that performance of a
company can be affected by its structure.
The best structure for your business depends on a
number of factors, for example the field you are in. However, most
experts agree that a bureaucratic organisation is detrimental to growth
and expansion in the long run.
A bureaucratic structure is one where there are
too many layers of management. Such organisations cannot compete well
with other less bureaucratic businesses.
Take the example of a refund decision. This
decision can be made by a line manager or a supervisor in the department
that handles refunds.
However, in some businesses, the front office
staff member has to report to a supervisor, who then reports to the line
manager, who then reports to a general manager who also has to report
back to the board before a decision is made on whether to refund or not.
Such a business will not survive long in the
market because the customer will move to a competitor who is able to
offer services in good time without quoting office procedures and
structures. A customer does not care about your internal structures;
they care for results.
Organisational structures can also kill innovation
and creativity. In such kind of businesses, before an employee’s idea
can be adopted, it has to be taken through many line managers and
decision making processes.
Some incidences of “poaching” of staff are about internal structures more than anything else.
Therefore, one of the signs that your business could be bordering on bureaucracy is high turnover, especially of talented staff.
Business strategists say the top organ of a
business should be engaged in making strategic decisions and not tiring
itself with operational issues.
In most bureaucratic businesses, the top managers
rarely get involved in strategic decisions but instead spend most of
their time with operational issues. This kind of a business cannot grow
or compete effectively with less bureaucratic ones.
Fortunately, many businesses are moving away from
bureaucracy and adopting more flexible structures. These are the kind of
businesses that are able to re-invent themselves and survive
generations.
They are also able to identify and groom successors.
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