Who’s in Charge? Business Structure and Its Influence

Structure facilitates the creation and implementation of strategy and the overall coordination of the enterprise. Organizational structure determines the placement of power and authority. It embraces two relationships: who is responsible for what, and who reports to whom. Organizations can become more “structure influenced'” when they hit market maturity, there is a decline in competition, their industry is stabile, tasks are routine, or they operate in a politically charged environment. Movement away from a strong structural influence may be caused by industry upheavals, deregulation, economic decline, and legislation.Businesses with structure-driven configurations buffer themselves from the need to change. In many ways they resemble a closed system and will use politics to capture key environmental resources. Organizations that can ignore the environment either reside in stable markets or have market power and resources to resist pressures to change. Uncertainty is reduced by pursuing routinization, standardization, and formalization. Performance in structure driven organizations is usually measured against internal standards like cost. Ironically, structure can also serve as a major factor in extreme open and flexible structures where rich organizations are well-adapted to their environment or operate in an unchanging setting.
Organizations with high structural influence may confine themselves to existing and predictable market niches. The choice of strategy is limited to adherence with specified power distributions, inviolate rules, and procedures with specific modes of interaction. Innovation and differentiation are rare, as norms of efficiency would be pursued. Managers within a structural influence are comfortable with existing functions and will have very little personal discretion. This uniformity reinforces the status quo.
There are five common ways to structure an organization: function, geography, product, customer, front-back hybrid.
 The functional structure is organized around major activity groups. It provides advantages in knowledge sharing, specialization, leverage with vendors, economics of scale, and standardization. This structure is most effective for managing a single product or service line and can create barriers between different functional areas. Each area tends to develop a unique perspective that can make collaboration difficult. Functional organizations operate most effectively in small companies, businesses with little diversity in product, or markets that don’t compete based on speed. Common criteria: single line of business, small, core capability requires depth of expertise in one or more functional areas, product diversity or fast product development cycles not critical, common standards important.
A geographic structure is organized around physical locations. It provides the advantage of local focus because power is given to the regional manager but slows down response time when a global solution is needed. Common criteria: high cost to transport, service delivery on-site, proximity to customer for delivery or support, local perception.
The product structure is organized around product divisions. It can evolve from a functional structure when a company diversifies and each line is large enough to support its own production. This structure has the advantage of a product development cycle, product excellence, and a broad operating freedom. Its challenges lie in divergence issues, duplication, lost economies of scale, and multiple customer points of contact. Common criteria: product features or being first to market is important, multiple products are produced for separate market segments, short product development time is an advantage; products have short life cycles, the organization is large enough to achieve the minimum efficient scale required to duplicate functions.
The customer structure is organized around major market segments. It provides customization, relationships, and total solutions. Difficulties arise in divergence, duplication, and scale. Common criteria: important market segments where buyers have strength, customer knowledge provides an advantage, rapid customer service and product cycle times are required, the organization is large enough to achieve the minimum efficient scale required to duplicate functions.
Front-Back Hybrid
The front-back hybrid structure contains elements from the product and customer structures. It allows for product excellence at the back end while increasing customer satisfaction at the front end. This structure is best for large organizations that have multiple product lines and segments, serve global customers, need to maximize both customer and product excellence, and have managers capable of managing complexity. The front-back hybrid has several advantages, such as a single point of interface for customers, cross-selling, value-added systems and solutions, product focus, and multiple distribution channels. The complexity of the design can overwhelm an organization. 
What Else is Important?
The size of an organization is another aspect for structural decision-making. Small organizations tend to have flat, simple, structures. They cannot afford to duplicate functions, so a functional structure will be most efficient. As an organization grows, it will have the resources to specialize its products and services by market or industry. This usually happens when an organizations volume increases to a point where they hit the break-even point. The size of an organization does not change the design process, only the number of iterations in the process. For example, a one hundred person firm may only have one level of design. The resulting units will not be large enough to be structured more than one level further.  
Every organization experiences the pulls that underlie their structure: pulls to centralize by top management, pulls to formalize by the technostructure, pulls to professionalize by the operators, pulls to collaborate by the support staff, and pulls to divide by the middle line managers. Since organizations tend to configure around the pull that dominates, structures can serve as a tool for diagnosing the problems of organizational design.
How is your organization designed and structured? Is the structure the dominate influence on how things get done? Does your organization have the right structure to grow and expand? What could change?

Why You Need a Holistic, Automated and Repurposed Business Strategy and Technology Plan

Ever notice the giddiness and happiness that comes from having your website complete, you finished an eBook and have it ready for the world to view or you finally completed a major portion of your marketing plan. Once you are done you feel like wow or like the movie where they say if you build it they will come. This is because you feel that the work is so good that others will come scrambling to see your work.Well if you been on the internet for any length of time, you know that does not happen. These days it’s getting harder than ever before to be able to get people to notice your business on the internet. Well without a solid business plan and strong web traffic you don’t have a business. When you start marketing, you will see some steps are tedious yet necessary. You will also lose motivation when times get tough.To get you and your business motivated and started on a positive note here are a few key principles to stimulate your creative juices.1. Holistic Solutions – Always thing beginning to end. Think through the definition which means to emphasize the importance of the whole and the interdependence of its parts. So you should be concerned with wholes rather than the parts. When you develop a holistic plan, you immediately see the holes in some of these wonderful, great, but partial solutions. Develop a plan that encompasses your short and your long range goals.Develop a conceptual long-term plan before you start working or before you even write even one word of your first book. The facts are, your first business venture fails or is not perfect or you will never get rich from writing or selling one of those 19.95 E-books. So before you begin your day, your business, your first customer appointment, think about what is next and next after that. You will make much better operational and spending decisions which improve the longevity of the business model.2. Automation – Automate every step of the process that you can. Time is money so start thinking how you can remove the manual labor at every step of the process. Remember there are a ton of repetitive and tedious processes. Reviewing manual labor reduces boredom and helps improve your focus.When you automate your operational office environment, you have tools and resources working for you while you sleep. So there is nothing better then waking up to an email box full of headlines that say you got paid.3. Repurpose – Reduce, reuse and recycle may sound like a Go Green slogan but it should be applied to everything you create. Come up with as many different income streams as you can and decide how you will incorporate them in to your long range plan.Start with your first project or activity then think about how you will create the next step based on the output from the first step. If it is the creation of an article, think about a series of articles, which can become an ebook, which can become a video that can become a teleseminar, etc.When your success is mandatory now, then you need to think with the end in mind.