Business & ManagementIB

Changes in organisational structures

1 year ago
Last Update on May 31, 2025
2 mins
447 Views
Changes in organisational structures......Along with the basic organisational structures, some businesses have attempted to adapt their structure in accordance with the changes in the business environment. Two different ways to deal....
Changes in organisational structures

Along with the basic organisational structures, some businesses have attempted to adapt their structure in accordance with the changes in the business environment. Two different ways to deal with changes in business environment are project-based organisation and shamrock organisation.

Project-based organisation a market structure in which employees are organised around different projects that a firm carries out.
Project-based organisation is supposed to be more flexible and responsive to market demand (therefore more typical of market-oriented businesses). There are project managers that delegate and are responsible for a particular project. After the project is done, the team is split up and reassembled to begin another project. Each team “borrows” members of different departments to complete the projects such as accountants, operations managers etc.

Advantages

  • Higher level of delegation: the project manager delegates tasks to different team members, which tends to be motivating for those workers as they feel empowered.
  • Each team member will do their part of the job efficiently since they are specialists in their field.

Disadvantages

  • Increased training costs.
  • Not all members of the workforce will be able to fit into this organisation structure.

Shamrock organisation a market structure in which a business trims its workforce to retain only multi-skilled core, which is concerned with the creation of a product. All other supporting, non-central functions are outsourced to the periphery.

This model suggests that businesses can reduce costs and gain competitive advantage by trimming their workforce.

Thus, on the shamrock, we have 3 leaves:

  1. Core managers: employees that are essential for the business
  2. Contractual fringe: activities that are outsourced to specialist businesses
  3. Flexible workforce: made up of part-time, temporary or seasonal workers that are employed when necessary

Advantages

  • Allows for complete specialisation of the core: they will concentrate on innovations and gathering new ideas.
  • The flexible workforce will be easier to hire and fire.
  • Can save on staffing costs.
  • Can hire experts in certain fields due to outsourced workers.

Disadvantages

  • The insourced workers will suffer from lack of job security which might lead to decreased motivation and lower productivity.
  • Not all members of the workforce will be able to fit into this organisation structure.

Frequently Asked Questions

Organizational structure change refers to altering the way roles, responsibilities, and power are distributed and coordinated within a company. This can involve redesigning departments, reporting lines, or decision-making processes to improve efficiency, adapt to market changes, or achieve strategic goals.

Structural changes in an organization involve fundamental alterations to its framework, such as mergers, acquisitions, divestitures, flattening hierarchies, creating new departments, or shifting to a matrix or team-based model. These changes aim to realign the organization with its strategy and operational needs.

Driving change in a federated structure requires strong communication, alignment on shared goals despite local autonomy, and often involves influencing leaders within each autonomous unit. Building consensus, demonstrating the benefits across the federation, and empowering local champions are key strategies.

  • Hierarchical: Adding or removing layers, changing reporting lines.
  • Flat: Reducing management layers to empower employees.
  • Divisional: Organizing by product, service, geography, or customer segment.
  • Matrix: Employees report to multiple managers (e.g., functional and project).
  • Team-Based: Centered around project teams with shared responsibilities.
  • Network: Relying on external partners and collaborations.
Next Topic
Tags:
Shares: