NEW: How to design an optimal organisational structure

21 May, 2022 - 12:05 0 Views
NEW: How to design an optimal organisational structure

The Sunday Mail

Memory Nguwi

The way individuals are organised to get work done is through the organisational structure.

It looks at individual power and responsibilities, and reporting lines between individuals. In practice, we have found that the majority of organisations are not designed in a way that allows them to complete their mission.

Consequently, most organisations are not designed in a way that is best for supporting the organisation’s mission and vision. Instead, we see that hierarchy is established so that people can be paid and so that it can be seen who has more power.

The first stage in developing organisational structures is determining the complexity of the managed value chain. You require a greater understanding of the organisation’s vision, mission, and strategy in the short-term and the long-term. This is in addition to the complexity of the value chain, which must be navigated first. Examine how the value chain and strategy contribute to accomplishing the goal of providing value to the client.

The structure should primarily follow your value chain, and it should be underpinned by the requirement to provide service to your clients. After you have reached this level of comprehension, you will need to classify the organisation into a series of levels known as levels of work that range from level 1 (“low complexity”) to level 8 (“extremely complicated value chain”).

Taking this into consideration will assist you in establishing the necessary number of management levels for the organisation. When I examine the value chain complexity of most organisations in Zimbabwe, I find that they do not reach level 5. This indicates that very few companies should have more than five management levels. It is highly likely that your organisation is not structured most effectively if it includes more than five layers.

Your organisation’s classification at the proper level guarantees that you place your chief executive at the appropriate level of work complexity for the organisation as a whole.

The following step is to categorise each job into the appropriate level of work complexity. This should be based on a comprehensive grasp of the responsibilities associated with each function. 

Once this has been completed successfully, you may discover that the manager and subordinate may be assigned to the same level of work complexity in some instances. That is a sure-fire formula for confusion. In this kind of situation, it is highly likely that the management and the subordinates would compete for control of particular tasks or that the manager will exercise excessive control over the subordinate. Another situation that could result from the previous analysis is that there are significant differences in work complexity between the boss and the subordinate. In this scenario, the manager will be unable to provide context and direction to the work of the subordinate, which will result in the work being performed poorly.

The subsequent step in designing structures, which is also an essential component, is to match the individual capacity to the level of task complexity associated with each role. This is where the majority of the difficulties come into play. People are typically assigned responsibilities that are beyond and above their “cognitive capability”.

When this occurs, for instance, a person may be given a level 4 role despite their maximum capacity being only at level 2 . This individual will reduce the role to level 2, where they feel most comfortable operating. Beyond the uncertainty that such employees bring to your company, you lose money by paying them for more complicated work than they are not capable of performing.

You might discover, for example, that a person who is classified at level 3 is capable of roles at level 5 in certain circumstances. 

If they are not recognised and provided a clear career path, such people may quit the organisation since they feel that they have nowhere to go with their careers. The most important question for CEOs to ask themselves in this situation is how many individuals in your organisation are placed in roles for which they do not have the capacity?

When the concerns mentioned earlier have been resolved, it will not make much difference whether your organisational structures are based on function, product, geographic location, or some combination of these factors. To the detriment of the organisation, traditional organisational structures have been developed based on function, without the issues outlined above receiving the attention and consideration they deserve.

After the problems above have been solved, the next key things to look at are the average span of control per manager and the ratio between core business workers and support function staff. Both of these factors are extremely crucial. As you clean up your structures, you should make sure there is no one-on-one reporting and no managers with only one subordinate. These kinds of actions are typically a sign of dysfunctional organisational systems. 

When it comes to enabling work to be done efficiently, organisational structures are vital. However, they are not sufficient to drive long-term corporate performance. As part of this process, you need to pay attention to the individual workload.

Other things that need attention are, pay and organisational culture. No matter how much you tinker with the structures, you won’t get very far if the other mentioned components are ignored.

*Memory Nguwi is an occupational psychologist, data scientist, speaker, & managing consultant- Industrial Psychology Consultants (Pvt) Ltd, a management and human resources consulting firm.  email: [email protected]  or visit our website at


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