Recruitment & Retention Opinion

Organizational Structures and Organizational Change

By Emily Douglas-McNab — April 30, 2012 4 min read
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Organizational change is complex. Success depends upon the extent to which the structure of the organization matches its practices, processes, people, measures, and messages. It is also important to understand the driving forces behind the need for change and the shifts that must occur for it to take hold.

Businesses, non-profits, school districts, government agencies, and other organizations decide to change for a variety of reasons, including to increase flexibility, encourage innovation, tackle spending more effectively, meet the needs of employees and customers, outperform competitors, improve organizational effectiveness, and quickly adapt to a changing environment. They also choose different organizational models based on the competitive environment, their internal structure and size, education and maturity level of the workforce, existing culture, and other factors.

We see two main organizational structures in public education, functional and divisional. Functional organizations are segmented by key functions or operations. For example, activities related to marketing, human resources, technology, finance, and operations are grouped into their respective departments. The advantages include clear reporting and hierarchical structures within each department as well as employees of similar educational backgrounds and experience levels working together. It can also make it easier to track spending or service levels of specific departments and individuals. However, a functional structure can cause departments to become short-sighted and siloed, leading to incompatible work styles and poor communication between different areas of the organization. Functional organizations are also known to be slow-moving when it comes to innovation or environmental change and often replicate efforts.

Divisional organizations are also known as a “product line structure” or “service line structure.” Employees in a divisional structure are grouped into divisions that contain all the necessary resources and functions to operate as a separate “business,” including their own marketing, human resources, technology, finance, and operational staff.

A divisional structure makes it relatively easy for organizations to evaluate and reward the performance of divisions and their managers, and to assign rewards in a way that is closely linked to their performance. Positively and negatively, divisional structures allow for decentralized decision making, which tends to occur quickly and allows leaders with specific expertise to make key strategic decisions in their area. The potential drawbacks to this model include duplication of efforts and a lack of horizontal communication from division to division. Also, division managers may be charged with making decisions that are not necessarily in their realm of expertise.

Public schools have traditionally operated under a functional structure with separate departments for HR, communications, finance, operations, transportation, etc. But, I am seeing more districts add divisionally-focused groups to their functional organization.

What does this hybrid organizational approach look like? Some school districts have begun to create ‘super-departments,’ such as the Office of Performance Management (OPM). The OPM contains all the traditional functions of the human resources department but also has subject matter experts as well as marketing, HR, technology, and operations staff.
Why reorganize? Some say flexibility. Some say strategic focus. More frequently than not, I see these ‘super departments’ developed using resources from grants. Like a complete reorganization, this hybrid approach can cause friction as the new “division” works to fit in socially, politically, and economically.
Does reorganization mean firing people? Not necessarily. But organizational change does carry that stigma.
What organizational structure is best when it comes to functional versus divisional? There is no correct answer. Some businesses will reorganize every 7-10 years, shifting from a functional structure to a divisional structure and then back to a functional structure (or even a matrix structure).
How does organizational change involve talent managers? Typically, the HR group works with executive staff to layout the reorganization and ‘move’ the appropriate people, processes, and programs.

Ultimately, the decision on when, why, and how to reorganization rests with the school district as to which approach best fits with their organizational strategy, funding structure, and educational-improvement goals. Organizational change is never easy for the people drawing up the new plans or for the staff responsible for implementing them. The process requires strong leadership, collaboration, and ongoing communication with stakeholders, and the structure must align with the district’s practices, processes, people, measures, and messages.

For more information on talent management and change management, you can follow me on Twitter: @EmilyDouglasHC

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