Restructuring
Kate Kirkland
kate_kirkland@btinternet.com
Introduction
• The importance of structure and its
relationship to strategy
• The determinants of structure
• Common structures used by not-for-profit
organisations
• Problems that may be structural
• Examples
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Organisational Structure
‘The means for attaining the objectives
and goals of the organisation’
Peter Drucker
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Organisational structures define
• The roles of staff and volunteers and their job
titles
• Route through which decisions are made
• Who is responsible and who is accountable to
whom, and for which activities
• How employees communicate with each other
and how information circulates
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Managing without a Structure
• No clarity on who was part of the
organisation
• No way of setting and measuring objectives
• No agreed way of making decisions
• All decisions would be open for
reconsideration
• No clarity on who should do what
• External people and organisations would
not know who to contact and whether a
response committed the organisation
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Advantages of having a clear &
transparent structure
• Enables participation
• Provides a framework for the
allocation of responsibilities &
resources
• Establishes the organisation’s identity
• Continuity and change
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Designing a structure
• Structure almost always follows strategy
‘unless structure follows strategy, inefficiency results’
Alfred Chandler, Prof of Business History, Harvard BS
• Managers are limited in choice of structures
• Structure impacts on staff motivation,
managerial control, organisational flexibility
• No one ‘best’ structure
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Structures evolve over time
• View structures as dynamic, not static
• Well-established structures are difficult to
change
• Major changes requiring structural
alteration include
– Appointing first paid staff
– Setting up teams or departments
– Diversifying the activities
– Establishing regional offices or local groups
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Perceptions of Organisational Structure
Focus
Outsider’s view
Insider’s view
Breadth of view
The organisation as a
whole, in its context
A particular part of the
organisation and its
environment
How structural
problems appear
Fairly obvious and clear Diffuse and uncertain or
cut
as the failings of specific
individuals
View of existing
organisational
structure
Arbitrary; one of a set of Could be adjusted here
possible arrangements and there, but basically
that may be out-dated
the obvious and correct
way to do things
Considerations in Overall organisational
proposing changes efficiency and/or
effectiveness
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Organisational,
departmental and
personal interests
Contingency School of
Organisational Analysis
• Based on research by David Wilson
• Avoid ‘tyranny of structurelessness’ &
‘sclerosis of bureaucracy’
• Key determinants of structure can be
identified
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Key Determinants of Structure
• Size
• Technology
• Operating environment
• Age & history
• Strategy
• Dependence
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Four Dominant Structures used by
Not-for-Profit Organisations
• Functional
• Divisional
• Federal
• Matrix or project based
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Functional structures
Chief Executive
Operations
Finance
Fundraising
Communications
•Tasks differentiated into separate departments according to function
•Hierarchy: information flows between CEO and departments
•Bureaucracy in strict meaning of term
•Work well in contexts that are relatively predictable, little change or competition
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Divisional structures
Chief Executive
UK Division
6 Regions
Overseas Division
Finance
Fundraising
Communications
Africa
Asia
90 branches
Latin America
•Divisions can operate relatively independently of geographic area or type of client
•Divisions co-ordinated by Head Office where service functions are provided
•Structure often the result of planned growth and adaptation to operating
circumstances
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Federal structures
Local
Organisation
Local
Organisation
Head Office
Local
Organisation
Local
Organisation
Local
Organisation
Local
Organisation
Local
Organisation
• Often formed when local organisations providing similar services ‘federate’
to establish nation stands, brand, represent common interests
• Local groups may be part of legal structure or autonomous organisations
• Head Office plays less directive role
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Matrix or project based structures
Chief Executive
Director
Operations
Director
Finance
Director
Fundraising
Director
Comms
Director
England
Director
Scotland
Director Wales
•Dual lines of authority, e.g. National Director (or Manager of service or
project ) reports to the Director of Operations on operational matters, the
Director of Finance on financial matters, etc
•Greater strategic flexibility, but organisation as a whole more difficult to
manage, particularly strategic decision-making
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Recognising Structural Problems
• Structural issues are not always
obvious
• Problems may appear to be due to lack of
commitment, bloody-mindedness,
inadequacy
• John Child suggested that there are certain
recurring symptoms of structural problems
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Problems that may be Structural
• John Child’s Recurring Symptoms
– Low motivation
– Late and inappropriate decisions
– Conflict and lack of co-ordination
– Inadequate response to changing
circumstances
– Rising costs
• These are not always an indicator of
imminent structural breakdown
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Structures for Today’s World
• Views about structures are changing
• Static concept of formal structures less
appropriate
• Organisations frequently have to reorganise
themselves
• ‘organising’ rather than ‘organisation’
• Harnessing knowledge distributed throughout
the organisation requires more than top-down
hierarchies
• Informal relationships and processes vital to
obtaining competitive advantage
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New Thinking
Structure
Configuration
Relationships
Processes
• Formal structures & processes must be aligned with informal
processes and relationships into coherent configurations
• Configuring the organisation so that these elements fit together
and with strategic challenges is crucial to organisational success
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Structural Change in Practice
• Introduction of corporate management team
to large charity
• Members to spend 50% of time leading their
department and 50% working as CMT
• Aims
• Strengthen leadership
• Greater co-ordination of departmental goals &
activities
• Recognise the importance of HR
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What worked well and why
• New structure improved organisational
performance
• CMT posts advertised internally and
externally
• Wide range of selection tests; Myers Briggs
Type Indicator used to recruit balanced team
• Existing departmental directors assured of
future within organisation
• Process facilitated by external consultants
• Trustees involved in selection process
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Lessons learnt
• Results justified the pain!
• Time spent on consultation worthwhile
• Organisational focus on change for a
considerable period so timing of change
important
• Using Myers-Briggs Type Indicators helps
produce a balanced team but can restrict the
pool of applicants when a team member leaves
• If in doubt, don’t appoint
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Structural Change in Practice
• Change of membership status in large
membership charity
• ‘Members’ ceased being members of the
charitable company
• Aims
• Strengthen governance
• Cut administrative costs
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What worked well and why
• Aims achieved
• Lead by Trustees & SMT
• Members & other stakeholders consulted
• Process facilitated by external consultants
• Members Forum established
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Lessons learnt
• Most members were disinterested
• Time spent on consultation lessened opposition
to change
• Trustees should have been reminded of their
‘cabinet’ responsibility
• If something is being taken away, offer
something better in return
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Structural Change in Practice
• Aim: To improve performance within budget
constraints
• Context: recently formed charity (12 staff,
income £1m) in which initial appointments of
some Heads of Departments not achieving
desired results
• Structural Change: Trustees and CEO agreed
to outsource two HoD roles to see if having
greater expertise, albeit for less time, would
improve performance
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What worked well and why
• Using external communications & fundraising
consultants for a day a week produced better
performance than employing full-time, less
experienced staff
• Consultants coached junior staff
• Better balance of ‘chiefs to indians’ for small
charity
• Reasons for change easy to communicate to
small staff
• Change introduced on experimental basis &
without long-term commitments
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Lessons learnt
• Staff departures can be an opportunity to
reassess deployment of human resources
• Worth trying innovative solutions
• CEO had to devote more time to staff
management
• Using consultants can be cost-effective
• Expertise
• Billed only for time spent on task
• Higher hourly pay balanced by no holiday/sick pay, no
NI, no pension contributions
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