Organization

Is your organization structured for success? The functionality of the organization's structure refers to how responsibility - and even more importantly, authority - is assigned throughout the organization.

In growing organizations, a centralized organizational structure is common, because the systems and controls required for decentralization are not sufficiently developed to allow for decentralization without loss of control. If the organization continues to grow, then at some point it will have to decentralize; if it does not, management will be too far removed from the market - from where value added is created - and thus it will lose touch with the operations of the business. When a separation like this occurs, a loss of entrepreneurial spirit naturally follows.

The larger the organization, the more important it is that the organization decentralize authority and responsibility, allowing the burden of management to spread throughout the organization, and in doing so, increasing the leadership capabilities of additional managerial ranks. Decentralization increases organizational flexibility, which is essential in changing markets.