The timing of major shifts or alignments in the structure depends to a large degree on the urgency of the situation. For example, if a company has had the inventory control staff reporting to the sales department for several years, in all probability an immediate change would not significantly affect the profit and loss statement. If problems are being experienced, reorganization per se will not solve all the problems. Any major change can create new problems while solving old ones. The timing will depend to some degree on the level of morale. Couple this with the degree to which employees have been accustomed to accept change through pre-conditioning and you get some idea as to how rapidly you can proceed.

The company that believes in participation can effect change more rapidly because it has previously involved its people in change, and it can more readily implement a major shift in organization or business strategy without negative effect on morale.

Timing of organizational changes is dependent to some extent on the ease with which new systems and procedures can be adopted and assimilated into the fabric of the formal organization. Naturally, the more the pre-conditioning and the greater the number and frequency and impact of previous changes, the greater the receptivity of those affected by the change and hence the better the organizational climate.

The readiness of people to accept organizational change will also affect the timing of a change. For example, if the present organization is top-heavy and therefore hurting the company economically and psychologically, employees will be receptive to change, even if a number of them are affected by it. A turnover of key executives coincident with major change is generally accepted in times of dire adversity with relatively little resistance. There are times when conditions and people are ripe for a change. Proper communication of a change, in advance, can stimulate a favorable reaction and can at the same time improve the organizational climate. It is usually obvious to everybody when the belt needs to be tightened.

From a top management viewpoint, when there is poor control, slow or inadequate communication of results, poor compliance, and too much dispersion of responsibility through ineffective committees, it is time for a good hard look at the present organization structure and climate along with the effects that each has on motivation and productivity.

Just a thorough, careful scrutiny of the organization chart may yield clues to cost improvement and organizational climate improvement. The formal organization chart can and should be audited. It should be constructed from information gleaned from a number of sources to determine who really reports to whom. Specifically, existing records should be examined, including announcements from the chief executive and orders from management. A close look should be directed at procedures and job descriptions. Job descriptions should be prepared where there are none, and they should indicate where each position reports as well as all the positions that report to it. These should be sketched out by functions and by reporting relationships. Decision-making authority needs to be reviewed and factored in. The work flow, lines of communication and key document distribution routes need to be followed. This information can be secured by interview and questionnaire.

While a sustained investment in human resources should be en courage, this does not mean permitting the situation to get out of hand. Each trainee should earn his salary through productive, profitable work. Having too many trainees is as bad as having too few. They expect rapid advancement to positions of increasing responsibility. Failure to provide this insures a high turnover rate.

There may be too many layers of management. Besides making communication more difficult, this situation requires excessive coordination and promotes inefficiency. Certain functions may be reporting too high in the organization. As an example, a metal fabricating company has a vice president of purchasing who reports to the president. Materials costs represent about 55 percent of total manufacturing costs, and most items purchased with a high value are standard shelf items of vendors. Here is a clear example of a man who does not belong in the business policy group. He is overcompensated, and he should report to the vice-president of manufacturing, who is rightly a member of the business policy group.

A man title and staff may be disproportionate to the size and needs of the business, thus incurring needlessly excessive costs. Poor control over titles also leads to confusion. Wherever possible, staffing ratios should be compared to those of competitors. Staffing could be unreasonable even in a profitable company. One way to check out the measured value of each position is to determine as precisely as possible its contribution to business results. Some positions-coordinator, assistant-to, liaison-will almost automatically eliminate themselves.

The foregoing examples of organizational shortcomings bring about a depressing organizational climate. Employees know when there is an awkward, cumbersome arrangement-sometimes accommodative in nature-that contributes to buck-passing and delays. A vibrant, healthy organization that stimulates and motivates is neither overweight nor underweight; it does not bulge out at the sides or stretch disproportionately upward or downward.

In ascertaining whether an organization shows signs of sickness or health, the human resources executive should review with the chief line executive whether specific provision has been made for the management of all essential activities. In the process, the two should ascertain whether any functions have been assigned to more than one unit in the organization.

It is quite possible in a rapidly growing company that the responsibilities of one or more key people have become too numerous and too complex to be handled effectively. In that event, the jobs should be split into logical elements for better control. In the long run it may be far less expensive to have two people take over a job now being done by one man.

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Category: Business
Keywords: Business, Organization, Structure, capital, Development, Credit, Sales, Communication, Resources,