An organizational structure allows companies to shape their business model according to several criteria (like products, segments, geography, and so on) that would enable information to flow through the organizational layers for better decision-making, cultural development, and goals alignment across employees, managers, and executives.
- Introduction to organizational design
- When does organizational structure really matter?
- Aligning organization and business model
- Organizational structure case studies
- Google Organizational Structure
- Starbucks Organizational Structure
- Apple Organizational Structure
- Amazon Organizational Structure
- Microsoft Organizational Structure
- Nike Organizational Structure
- Tesla Organizational Structure
- Walmart Organizational Structure
- Toyota Organizational Structure
- McDonald’s Organizational Structure
- Samsung Organizational Structure
- Facebook Organizational Structure
- Dell Organizational Structure
- eBay Organizational Structure
- IBM Organizational Structure
- Sony Organizational Structure
- Create business innovation units not necessarily aligned with the core organization
- Centralization vs. Decentralization
- Connected Business Frameworks
Introduction to organizational design
Understanding the organizational structure of a company allows an understanding of how decisions are made. It is also a powerful tool for executives to shape their organization toward desired goals and long-term objectives.
For that sake, designing a proper organizational structure also allows the execution of a company’s business model. Based on the organizational structure the company will also have a different shape.
For instance, some organizations are typically hierarchic, which implies a top-down approach of information flow and definition of roles.
Read Also: Google Organizational Structure In A Nutshell.
Starbucks Organizational Structure
Read Also: Starbucks Organizational Structure In A Nutshell.
Apple Organizational Structure
Read Also: Apple Organizational Structure In A Nutshell.
Amazon Organizational Structure
Read Also: Amazon Organizational Structure In A Nutshell.
Microsoft Organizational Structure
Read Also: Microsoft Organizational Structure In A Nutshell.
Nike Organizational Structure
Read Also: Nike Organizational Structure In A Nutshell.
Tesla Organizational Structure
Walmart Organizational Structure
Toyota Organizational Structure
Read Also: Toyota Organizational Structure In A Nutshell.
McDonald’s Organizational Structure
Samsung Organizational Structure
Read Also: Samsung Organizational Structure In A Nutshell.
Facebook Organizational Structure
Read Also: Facebook Organizational Structure In A Nutshell.
Dell Organizational Structure
Read Also: Dell Organizational Structure
eBay Organizational Structure
Read Also: eBay Organizational Structure
IBM Organizational Structure
Read Also: IBM Organizational Structure
Sony Organizational Structure
Read Also: Sony organizational structure
Create business innovation units not necessarily aligned with the core organization
Business model innovation is not an easy game. Indeed, in many cases, innovation spurs from the most unexpected places, and an organization that is not ready to capture it might be well disrupted in the future.
But how do you structure a large company for business model innovation? Where a small company is able to adapt more quickly to changing times. Large corporations might not survive and adapt fast enough.
In part that’s due to the fact that large corporations are extremely well aligned with their key customers. And as highlighted in the book, The Innovator’s Dilemma, in most cases managers in those companies make sound decisions in not pursuing certain opportunities.
That’s because often opportunities that don’t make sense in terms of the bottom line and key customers might also be those that in the long run will turn out to succeed.
That is why it’s important to have within any organization “innovation units” or small teams of people that operate independently and that are not necessarily aligned with the overall organization’s goal and vision.
In some cases, organizations design their company to empower employees to take action as they were entrepreneurs.
While this sounds interesting in theory, for larger organizations – where most of the activities are focused on keeping and maintaining existing processes – intrapreneurship might not be viable, if applied to the whole organization.
Instead, the company will have a dedicated group of people that will be more independent or assigned to specific projects, that are highly innovative. Or the company, still in a scale-up stage, can assign part of the time of its employees to run projects they like.
For instance, Google’s 20% Project used to give its employees the freedom to pursue the products and projects they loved the most.
Centralization vs. Decentralization
The debate over centralization vs. decentralization is still open. Classic examples of extremely centralized organizations are represented by Government and bureaucracies in general.
Companies, especially at a large scale use a hybrid approach, where one part of the business is highly centralized, and other parts are instead, highly decentralized.
For instance, Coca-Cola uses what I defined as a franchained business model where its corporate structure is centralized. However, at the level of the bottler, once operations are established, Coca-Cola leaves them independent to run the business.
Another example is Amazon. In general a centralized company, mostly run in hierarchies. To run some parts of its business it uses a different approach. In last-mile delivery, Amazon relies on an army of “independent drivers” or partners, that are not directly tied to Amazon’s hierarchy, but kept independent.
Other resources for your business:
- Types of Business Models You Need to Know
- Marketing Strategy
- What Is a Business Model Canvas? Business Model Canvas Explained
- Blitzscaling Business Model Innovation Canvas In A Nutshell
- What Is a Value Proposition? Value Proposition Canvas Explained
- What Is a Lean Startup Canvas? Lean Startup Canvas Explained
- How to Write a One-Page Business Plan
- The Rise of the Subscription Economy
- How to Build a Great Business Plan According to Peter Thiel
- What Is The Most Profitable Business Model?
- The Era Of Paywalls: How To Build A Subscription Business For Your Media Outlet
- How To Create A Business Model
- What Is Business Model Innovation And Why It Matters
- What Is Blitzscaling And Why It Matters
- Snapshot: One Year Of “Business Model” Searches On Google In Review
- Business Model Vs Business Plan: When And How To Use Them
- The Five Key Factors That Lead To Successful Tech Startups
- Top 12 Business Ideas with Low Investment and High Profit
- Business Model Tools for Small Businesses and Startups