Structural Change

If the present organisation structure does not adequately fit the need of chosen strategy in the light of the above strategy- structure fit and strategic principles of organizing, top management should look for reorganization. Many companies have reorganized their structures recently because of the change in their strategies due to the following factors:

• Rapid growth leading to problems of manageable size and communication;
• Excessive diversification of product lines;
• Increasing competition and environmental changes;
• Changes in managerial styles particularly from centralized family decisions to decentralized decision making;
• Change in organizational climate and managerial commitments; and unsatisfactory work performance because of structural conflicts.

However, before taking reorganization, it is constructive for management to check off the following questions to ensure whether the firm can function efficiently without the reorganization:

• Has firm clarified its n1ission and responsibilities to all concerned under- the existing structure?
• Are there significant opportunities for improved direction and motivation in day-to-day operations?
• Can procedures and practices be improved within the existing structure?
• Should any key personnel reassignments be made?
• Having exhausted the above, what, if any, organizational changes should be made?

If the change is required, it should be total package of articulated and efficient structure, effective back-up systems, and motivated people dimensions. Initially, the process reorganization was the responsible of line management, usually the chief executive. It was, therefore, a highly intuitive process largely inspired by management’s desire to solve certain existing problems, make key personnel changes, or take up the fad of the time. However, the trend has channel. Now most of the large organizations have either organisation development department or take the help of external consultants because the emphasis is on planned change. Since the organisation is a complex system of mutually dependent parts, it is logical that organisational change involves an alteration or modification of one or more parts of the system. Thus what is needed is an operational scheme of organisation of parts so that the focus and the direction of the change sought may be clearly identified for any given situation and the extended and interactive effects of a change in anyone part of the system or on the other parts may be anticipated and traced. Thus structural reorganization should be in the context of other interactive subsystems of the organisation, viz. technology, behavioral, technical and procedural, goals and values, and managerial. Therefore, mere restructuring of organisational relationships is not sufficient but an integrated approach is required.