In the world of competitive triathlons, there is a saying: "You might not win the race in the swim, but you can certainly lose it there." The maxim emphasizes how initial actions lay the foundation for success or failure. For leaders, decisions on organizational structure are similar to the triathlon swim; it may not be the key to organizational success, but failure to recognize the importance of structure selection and maintenance-and the impact it has on employee performance-could easily be the source of downfall.
Next to choosing the organization's strategy, the selection of organizational structure is arguably the next most important decision leaders make. In Designing Organizations, Jay Galbraith points out, "By choosing who decides and by designing processes influencing how things are decided, the executive shapes every decision made in the unit."1 In today's fast-paced, competitive environment, organizations can ill afford to neglect the advantages that come from organizational design. Despite this reality, large traditional organizations such as the Department of Defense (DOD) continue to maintain stifling, rigid bureaucracies that hamstring talent and place the organization at a disadvantage.
While still the premier fighting force in the world, the U.S. military stubbornly retains organizational structures that impede flexibility, adaptability, and creativity and undermine the execution of its operations in an increasingly challenging environment. In 2001, Major Eric Mellinger, USMC, wrote, "The modern military staff embodies the industrial age precepts of hierarchical, vertical flows of work and supervision." (2) This critique echoed the indictment leveled by General Anthony Zinni, USMC, the former commander of U.S. Central Command. He stated, "Napoleon could reappear today and recognize my Central Command staff organization: J-1, administrative stovepipe; J-2, intelligence stovepipe--you get the idea. The antiquated organization is at odds with what everyone else in the world is doing; flattening organization structure, decentralizing operations, and creating more direct communications. Our staff organization must be fixed." (3)
Despite this acknowledgment of the problems generated by outdated structure, the military has continued to resist change in most sectors. This resistance is grounded in the daunting size of DOD, the natural inertia of the organization, and its accustomed use of the "vertical flow of control, facilitating dissemination of orders from top to bottom and ensuring compliance from bottom to top in a rapid efficient manner." (4) Since this emphasis is unlikely to change, the key to getting leaders to adopt a new structure depends on showing the adverse impacts of the current structure on organizational performance and employee behavior and how both will improve through structural change. As a RAND study pointed out, "The challenge for the U.S. military is to develop new organizational structures that achieve the efficiencies and creativity businesses have gained in the virtual and reengineered environments, while at the same time retaining the elements of the traditional, hierarchical, command and control system (for example, discipline, morale, tradition) essential for operations in the combat arena." (5)
Beyond the Org Chart
To appreciate the impact of structural decisions, we must comprehend the multiple components of the structural dimension. According to recent research by Joseph Krasman, a comprehensive look at structure requires consideration of routinization, standardization, span of control, formalization, and centralization. (6) Taken together, these components provide a significantly expanded concept of organizational structure, and it becomes easier to see how structure decisions have so much influence on employee behavior.
Leaders must also contend with the …