Structures in organisations

One of the key standard questions an organisational development practitioner will ask any organisation s/he will engage with is to show their organigram. An organigram will show the functions in the organisation and how they are related to each other. Sometimes the diagram shows the names of the members in the organisation, but this is not always the case. The organigrams that we see are often very hierarchical and this raises the question how much thought is given to the structure and how it relates to the strategy of the organisation.

In his influential book ‘Structure in fives’, Henry Mintzberg identified 5 organisation types that emerge as a result of their blend of strategy, environmental forces and the organisational structure. The five organisation types he identified are entrepreneurial, machine, professional, divisional and innovative organisation.

As the organisations Well Grounded is working with are often small we will start to look at the entrepreneurial organisation.

Most organisations start as entrepreneurial organisations with a simple, flat structure. The leader is often also the founder and charismatic. The organisation is relatively unstructured, informal and lacks standardised systems.  These characteristics allow the organisation to be very flexible and quickly adopt to new opportunities and challenges. However, as entrepreneurial organisations grow the leader(s) often become so overwhelmed that it affects their decision-making capacity. This is when they need to start sharing power and decision-making. Also, when an organisation’s success depends on one or two individuals, there’s significant risk the organisation may disintegrate when the leaders retire for whatever reason. Hence, a time to rethink the structure!

Depending on the kind of services the organisation delivers and the environment it operates, it will have to move on to a new structure when the organisation grows. Implementing more hierarchy, task division, rules and procedures will transform them into machine organisations or bureaucracies. Leadership in the organisation will become top-down and the organisation will become less flexible to change. A special type of bureaucracy is professional organisations where highly trained professionals are given more autonomy and control in the organisation. By their nature, specialists are hard to manage. For organisations with different specialised activities, the divisional organisation type is more appropriate. This organisation type is characterised by a central unit and divisions or departments that operate relatively autonomously. The central unit can therefore focus more on the ‘big picture’ and strategic issues, but the danger is that a   ‘disconnect’ could arise between the central unit and the divisions or that there can be duplications of efforts between the two levels. Innovative organisations, also called adhocracies, are organisations that embrace constant change depending on the challenges that they are faced with. Innovative organisations are often guided by projects and the structure changes when new projects come in. Contrary to the entrepreneurial organisation, decision making is very much decentralised and determined by the skilled professionals that are brought together to tackle a project. The leader needs to confidence in the people he works with. The rapid changes are often stressful to the people in the organisation but the organisation remains flexible to adapt new challenges.

When looking at the organigrams we often see quite traditional hierarchical structures. A top-down structure that suggests there is a clear division of tasks and responsibilities. At the same time, we observe that these organisations are strongly guided by their charismatic founders or very much project oriented and in flux. Organigrams are often considered stable and do not change a lot over the years. In reality, the organigrams do not do justice to the changes the organisation is going through. These changes are more often a positive sign than a negative one and deserve appreciation.

Organigrams have to be living documents that reflect the development of the organisation. CSOs are very dynamic entities that need to respond quickly to changes in their environment and opportunities that they are faced with. Organisations that strive for stability will fail to survive in the rapidly changing natural resource management environment. Only in that way they stay effective in reaching their mission. This will have to be reflected in their organigrams.