Measurable Standards

An effective organisational structure cannot be created by adherence to sound principles alone. The structure must be designed expressly to help turn the vision into reality. The energies of the whole staff must be harnessed to make the vision happen, and not dissipated by internal politics, which often result from an unsatisfactory organisational structure.

The steps required to develop an effective structure are:
Define the vision and the goals to be achieved. For example, if a goal is that, say, overseas activities will contribute 25% of group profits within 3 years, compared to under 5% presently, then weight must be given to this in the organisation structure now to help make it happen.
Select the strategic options to be pursued. For example, if it is decided to switch the emphasis from direct sales to customers to selling via distributors, then organisational change will be necessary.
Identify internal obstacles to success, e.g. if the present policy of subcontracting of software design is causing unsatisfactory customer service.
Review the present organisation to identify features to retain and aspects which need to be changed, e.g. if some divisions share a common sales force, which results in a lack of accountability.

The last step should be to review the present organisational structure, because this can only be done effectively in relation to visions, goals and obstacles which have been identified.

Once the organisational structure has been created, other features should be incorporated.

Interest should be charged to strategic businesses, on a notional basis if banking is centralised, to encourage people to pursue cash management to minimise the amount of money invested in the busi


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