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Build a Sound Organization Structure |
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The organization exists so that tasks can be managed, people supported, and results achieved. |
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At Harley-Davidson, the organization chart is three overlapping circles: a Create Demand Circle responsible for marketing and sales, a Produce Products Circle for engineering and production, and a Support Circle for all other functions. In the middle, where the circles intersect, is a Leadership and Strategy Council that oversees general management functions like planning, budgeting, and human relations. The overlapping of the circles emphasizes the interdependence between areas and encourages participation and collaboration.
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At Xerox, a three-level organization chart shows the corporate staff at the bottom supporting the business teams and districts at the top. Profit and loss responsibility rests with the business team general managers. |
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At one of the world's largest service companies, Rentokil, in England, the lean headquarters staff is untypical of a company that employs 150,000 people. The organization is managed through branch offices operating as independent profit centers. |
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No single organizational structure works everywhere. |
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In his book Creating Change-Capable Cultures, Gerald Sentell says, "Structure is to an organization as channels are to river systems. They direct and control flows of human interaction and activity...When the structure can contain and direct the flows of behavior, the system functions. When the flows jump out of the structured channel, the results can create great change."3 |
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When organizations are structured to maximize strengths within departments, the result can disrupt the overall optimization of the organization. When departments are organized to serve themselves, the sum total of these departmental kingdoms is not maximized to serve the customerand business is lost to competitors who know how to focus strengths on the customer. |
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Systems and processes should not be designed to accommodate the strengths and weaknesses of individuals. Instead, the requirements of the system determine where people are placed in the structure. |
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