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We all go to work every day, go to assigned locations, and perform our jobs — and we don’t ever think about how our organization is arranged. However, Organizational Structure is critical both for a pany and its employees. People should think very carefully about the organizational structure of the panies for which they work or of panies for which they intend to work. In the long run, Organizational Structure can spell the difference between success and failure for a pany, as well as for the individuals who work there.The purpose of this white paper is to examine those challenges facing any pany wherein Organizational Structure is not probably aligned with business strategy, and to consider the benefits and pitfalls of a number of Organizational Structure options as they pertain to the longterm success of individual employees and the pany as a whole.The 4 Essential Management FunctionsThe first thing to consider is that most people who study Management know that Organizational Structure is a crucial ponent of the overall business strategy, just as important as Planning, Leading, and Controlling an organization.Figure 1: Major Components for Achieving Organizational ObjectivesIn essence, Organizing is the manner in which a pany utilizes its resources specifically, its human resources. How do we organize jobs into departments? How do we answer the questions “who does what” and “who reports to whom” in the chain of mand? There is also an implicit issue of how to coordinate all of these people and all of these duties across an extended enterprise. Organizational Structure is the framework for answering these questions and more.Flexibility of the OrganizationWhile many panies today are still reluctant to change their Organizational Structure, more and more are ing to find that they need to be adaptive and they need to be flexible. In fact, Management Theorists people who study this at the academic level are starting to encourage organizations to change their structure because they need to be prepared to respond to what we call “trigger points.” A trigger point is an external event that has an impact on an organization. It could be a change in the markets。 it could be a change in global petition。 it could be the advent of new technology. These trigger points and any numbers of others call for immediate responses, as well as organizational flexibility and adaptation.Examples of Strategic RenewalFigure 2: Major Businesses Adapt to Changing Business EnvironmentsA pany’s organizational realignment to pursue new business objectives, to create new products or services, or to target new consumer markets is referred to as Strategic Renewal. Figure 2 features several prominent examples of Strategic Renewal: Virtually 95% of EGamp。G’s business was government contract work until they changed their strategy and became a mercial vendor。 Enron was an energy production pany that became an energy trading pany。 GE was a modity pany that morphed into a ValueAdded。 Grand Union changed from a very lowend grocery business into a very highend pany。 IBM changed from products to services and consulting。 Marks and Spencer, a UK clothing pany, switched from a conservative adult market to a young and trendy market。 Renault, the almostexclusively French automobile manufacturer, finally expanded into the international market。 and Walgreen’s, a brickandmortar mainstay, has now established a heavy Internet presence, with growing online sales.Those are great examples of panies that not only changed their business strategies, but changed organizational structures to match their new strategies.Other Drivers of ChangeThere are other reasons why organizations change their business strategies and Organizational Structures. The table below cites a number of these “drivers of change” and the key points of their impact on business, as well as examples of panies that adapted to such changes.Figure 3: Drivers of Change and Their Impact on BusinessSuch adaptation may entail initiatives aimed at increasing employee participation in the decisionmaking process, or embracing concepts such as Total Quality Management (TQM), which has been a trend for about fifteen years. Any pany still embracing TQM at this point certainly needs to consider changing its organizational structure. Process reengineering and concurrent engineering, as the terms suggest, are measures taken to turn a pany’s engineering practices towards process analysis and concurrent engineering, bining both the design and manufacture into one division. Adapting to Six Sigma demands panywide process improvements and close scrutiny of those processes from one division to another. Globalization is an intimidating and sometimes controversial issue that also tends to drive panies to change their Organizational Structures. Business model reinvention — such as IBM changing from a product manufacturer into a services and consulting firm — is one of the more drastic examples of busi