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What's Happening
The newsletter for switched on people
Issue 36 August 2001

How do organisational structures support

If you lined up the CEO’s and CFO’s of some of Australia’s top 500 companies and asked them one simple question about their organisation like, ‘What is the most pressing issue you face?’ What would they say?
On the 13 July 2001 the Australian Financial Review published a report indicating the most pressing issue facing organisations is customer satisfaction.
So, how do organisational structures support this quest for customer satisfaction?
A good starting point is to look at the main types of organisational structures, these include Functional, Divisional and Matrix.  Each model offers advantages and disadvantages when striving for customer satisfaction.

This model groups people by the functions or actions they perform eg. Finance, HR or Production.  Being specialists they have a common language which makes internal communication easier.  If a customer is dealing with many different parts of an organisation, for example, Supply, Production and Accounts they may find this type of structure does not support the One-Stop-Shop theory for csutomer satisfaction.

People are grouped according to holistic customer needs.  Examples of these models included state based teams.  This structure allows the delivery of customer needs to be coordinated quickly and with ease, however these actions are duplicated across different divisions resulting in greater costs to the organisation and hence the customer.

A Matrix structure requires dual reporting lines to operate, for example the Learning and Development Manager reports to the State Manager and Learning and Development Manager Head Office.  Greater people resources are promoted through this model and result in more innovative solutions for the customer.  However command conflict increases with project managers and direct report power struggles, which can delay customer delivery.



Organising people and work groups to focus on the delivery of customer satisfaction comes with many advantages and disadvantages.
A hybrid version of these may also be a solution for a period of time.  More over, all organisations must identify costs to customer satisfaction as being acceptable.

Overall each model needs to be considered and aligned with your organisational strategy. There is no right or wrong structure just an appropriate structure for the culture and capabilities of the day, to achieve the ultimate in customer satisfaction at the all important ‘moment of truth’.

Personally Speaking

Well, the politcal climate gathers momentum as Australians head for a federal election. Knowledge Nation is released and some love it, some hate it. 

Regardless of political leanings, this type of intitivive is a positive step to secure knowledge captial.  Lets see what happens over the coming months.

Take care,
regards Sam



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