Since we organize to serve a purpose, our sense of order is context dependent, not an absolute. In other words, while everything could be in order, the order in which each is in is not the same—all order is not the same order. For example, the order of my desk suits my purposes and the order you create on your desk supports yours’. To the degree that our purposes are different, correspondingly it is likely our desks will be ordered and managed differently.
With many business enterprises seeking the same purpose—profit maximization—it is not surprising that they are similarly organized and managed. The age-old issues of who should be in-charge of what and how many one can have direct authority over seem to be operative. Effectually the organizing structure is a means to bring about order by dividing the labor (or work of the business) into more manageable clusters or compartments. Accordingly, the organizing structure becomes the instrument for controlling the assorted skills and efforts of people toward the effective and efficient pursuit of profit.
Traditionally organizations are structured using a two-dimension coordinate system as the framework for bringing order to the business enterprise. That is, on the vertical axis runs the amount of authority and on the horizontal axis are the categories or specializations of activities or work disciplines. It is a means for dividing the authority and labor (i.e. the work)—the thinking and the doing.
[Facing a highly dynamic business environment, many have become enamored with the notion of being or becoming a flat organization. Supposedly this makes for a more flexible and adaptable enterprise. The fact that form means little without function and intent, seems to be overlooked in the application of the same two-dimensional framework.]
When we design the structure of a business enterprise with little to no attention to the nature of the core work of the business and the needed strategy supporting capability, then we inevitably facilitate fragmentation. Not understanding the work as a system along with seeking to control the work, will inevitably lead to dis-integration and a growing inability to learn and to develop knowledge. Talk about shooting ones’ self in the foot!
Consider the following as illustration. I recently worked with an organization structurally designed in the traditional manner. Every compartment had its responsibility and each was managed independently, when in fact the work requires interdependence. Yes silos were evident and collaboration and synergy were obstructed.
Hence if you had dealings with one compartment in the past and you began working with a different compartment, information could not be shared or transferred. So the new compartment had to re-create the exact same information. This requires far more effort, energy, and unnecessary costs, where a simple keystroke would do the job.
The structure of the organization supported control over of each compartment, as well as the dis-integration of the organization’s work. The result is greater costs; costs inherent in the very structure, work processes and associated management of the enterprise. Since these costs are woven into the very design, and thus not captured as such on anyone’s spreadsheet, how would those in authority know?
Now extrapolate this throughout an entire organization and you can easily see the unnecessary costs created all for the sake of management control. In short, efforts to control can, and often does, lead to increased costs.
Moreover, given that most properties of the organization are emergent—such as the performance of the enterprise—designing and structuring an enterprise in this way will very likely lead to less than optimal performance.
Continuing as if the business of business is profit is both limited in perspective and limiting to capability and performance. If people are really concerned about the quality of the organization and if knowledge creation is central to viability of the business, then why continue organizing and managing this way? Wouldn’t it be more prudent to ensure the wholeness of the work of an enterprise?