Home ›› 19 Apr 2022 ›› Editorial
Bangladesh is a growing economy with immense potential. The period of this rapid growth requires more people to support the growth requirement. As a result, the firms with this growth situation often need dedicated manpower to usher. This situation often brings the challenges of manning or staffing for the requirements which is faced with challenges. For us it is a kind of double whammy situation, whereby more and more organisations are vying to come to corporate structure but as the demand for qualified professionals grow so comes the challenges of finding them.
From my personal experience, launching an organisation in the financial sector faces a great demand for people. One needs to strike a balance between the expenses need for staffing while the return on investment asking for shareholders returns. As a result, how do one seeks the optimisation? This is where the organisational efficiency comes into play. That’s where one needs to design the organisation structure to ensure the needs of the time. Hence, leveraging the organisation structure is of immense importance.
Proper organisation with the required organisation structure (organogram) helps the enterprises to attain their operational and strategic growth. Organisational capabilities have a profound impact on any business. A thorough understanding of organisational capabilities and their different types allows you to focus your efforts on building the most impactful ones. Learning & Development (L&D) and HR professionals who can provide guidance in this area will help their organisations be better equipped for future success and ready to thrive in a rapidly changing environment. Organisation capabilities (OC) are the intangible, strategic assets that an organisation draws from to get work done, execute its business strategy, and satisfy its customers. These capabilities cannot originate from a single effort or by following an external template. Instead, they are acquired and refined internally from multiple interactions to be organisation-specific. They can include expertise, activities, information, knowledge, procedures, processes, skills, systems, technologies, or unique adaptive features.The strength and alignment of such assets define a company’s identity and differentiate it from competitors. Each organisation develops and integrates these attributes into its culture over time, so they are challenging for others to pinpoint and replicate. For instance, Coca-Cola could sell its soft drink formula to another company, but that company would not be able to emulate the same emotional connection customers have with Coke.
Business capabilities are an integrated set of processes, technologies, and deep expertise that are manifested as a functional capacity to capture or deliver value to the organisation. They outline “what” a business does, as opposed to “how” a business does it. They are the definition of your organisational skills, best represented in a landscape map that allows you to evaluate the full spectrum of capabilities against each other.Business capability maps are not just about technology; these tools are designed to improve an organisation’s holistic ability to improve a business outcome, and in many cases, it is not the technology that is the constraint, but rather a process, skill, or policy issue.Human Resources management can significantly contribute in building organisational capabilities if they get their thinking out of their traditional human resources functions. The term “HR Potion” was recently used among HR professionals to refers to the HR’s ability to create a magic mixture that can gently impact the organisational performance in an unusual fashion. It simply means that the difference comes not from what the HR professional do, but HOW they do it!!! All HR departments have functions for attracting people, developing, and retaining them. Yet, many fail to attract the right people, develop the wrong people, and detain who already have not options to go away. Sometimes HR department is not seen that way, but at least they are not aligned with the organisational strategic orientation and are not collaboratively building its capabilities.
Organisational structure is extremely important during a business. It helps managers manage the human resources issues. Allows managers to tackle as to how employee treatment occurs in the organisation. It also helps employees understand what are their positions, who are they reporting to and who reports to them. It helps create a hierarchy within the business. Without a corporate structure, it would be extremely difficult to access who is responsible for what. A well-maintained organisational structure can provide a roadmap for the advancement of employees within the organisation which helps motivate employees to achieve their goals.
Organisational structures have evolved from rigid, vertically integrated, hierarchical, autocratic structures to relatively boundary-less, empowered, networked organizations designed to respond quickly to customer needs with customised products and services.
Two main types of vertical structure exist, functional and divisional. The functional structure divides work and employees by specialisation. It is a hierarchical, usually vertically integrated, structure. It emphasises standardisation in organisation and processes for specialised employees in relatively narrow jobs.
This traditional type of organisation forms departments such as production, sales, research and development, accounting, HR, and marketing. Each department has a separate function and specialises in that area. For example, all HR professionals are part of the same function and report to a senior leader of HR. The same reporting process would be true for other functions, such as finance or operations.
In functional structures, employees report directly to managers within their functional areas who in turn report to a chief officer of the organisation. Management from above must centrally coordinate the specialised departments.
This structure works best for organisations that remain centralised (i.e., a majority of the decision-making occurs at higher levels of the organisation) because there are few shared concerns or objectives between functional areas (e.g., marketing, production, purchasing, IT). Given the centralised decision-making, the organisation can take advantage of economies of scale in that there are likely centralised purchasing functions.
An appropriate management system to coordinate the departments is essential. The management system may be a special leader, like a vice president, a computer system or some other format.
A matrix structure combines the functional and divisional structures to create a dual-command situation. In a matrix structure, an employee reports to two managers who are jointly responsible for the employee's performance. Typically, one manager works in an administrative function, such as finance, HR, information technology, sales or marketing, and the other works in a business unit related to a product, service, customer or geography. Matrix structures are common in heavily project-driven organisations, such as construction companies. These structures have grown out of project structures in which employees from different functions formed teams until completing a project, and then reverted to their own functions. In a matrix organisation, each project manager reports directly to the vice president and the general manager. Each project is, in essence, a mini profit center, and therefore, general managers usually make business decisions.
The matrix-structured organisation also provides greater visibility, stronger governance and more control in large, complex companies. It is also well suited for development of business areas and coordination of complex processes with strong dependencies.
Matrix structures pose difficult challenges for professionals charged with ensuring equity and fairness across the organisation. Managers working in matrix structures should be prepared to intervene via communication and training if the structure compromises these objectives. Furthermore, leadership should monitor relationships between managers who share direct reports. These relationships between an employee's managers are crucial to the success of a matrix structure.
More recent trends in structural forms remove the traditional boundaries of an organisation. Typical internal and external barriers and organisational boxes are eliminated, and all organisational units are effectively and flexibly connected. Teams replace departments, and the organisation and suppliers work as closely together as parts of one company. The hierarchy is flat; status and rank are minimal. Everyone—including top management, managers and employees—participates in the decision-making process. The use of 360-degree feedback performance appraisals is common as well.
Modular structures differ from hollow organisations in that components of a product are outsourced. Modular structures may keep a core part of the product in-house and outsource noncore portions of the product. Networks are added or subtracted as needs change. For a modular structure to be an option, the product must be able to be broken into chunks. For example, computer manufacturer Dell buys parts from various suppliers and assembles them at one central location. Suppliers at one end and customers at the other become part of the organisation; the organisation shares information and innovations with all. Customisation of products and services results from flexibility, creativity, teamwork and responsiveness. Business decisions are made at corporate, divisional, project and individual team member levels.
A virtual organisation (sometimes called a network structure) is cooperation among companies, institutions or individuals delivering a product or service under a common business understanding. Organisations form partnerships with others—often competitors—that complement each other. The collaborating units present themselves as a unified organisation.
A learning organisation is one whose design actively seeks to acquire knowledge and change behaviour as a result of the newly acquired knowledge. In learning organisations, experimenting, learning new things, and reflecting on new knowledge are the norms. At the same time, there are many procedures and systems in place that facilitate learning at all organisation levels.
As an organisation grows or passes from one stage of development to another, carefully planned and well-conceived changes in practices and strategies may be necessary to maximise effectiveness. There are no guarantees that an organisation will make it from one stage to the next. In fact, a key opportunity for leadership is to recognise indicators that suggest an organisation is in a risky or unhealthy stage and to make appropriate structural adjustments.
Corporate Bangladesh is expected to explore the efficiency in scaling up the business to ensure the growth potential.
The writer is MD and CEO of Community Bank. He can be contacted at [email protected]
