What is an organisational structure?
It is a hierarchy of roles and role relationships within a particular organisation that is meant to produce direct output and delegated output of certain complexity. The most cost effective organisation should have a match between the number of delegation levels, the number of levels of work that the levels of delegation produces and the levels of value chain complexity for which the structure is developed.
OVERVIEW OF REQUISITE ORGANISATION
Requisite Organisation is a term and methodology developed by Elliot Jacques and Cathryn Cason (1998), as a result of the research in stratified systems theory, general theory of bureaucracy, work complexity and human capability over 60 years. According to Elliot Jaques, requisite organisation is the system of business organisation that aims for effective managerial organization and managerial leadership, based on the systematic application of scientific research about the nature of work and the nature of individual’s capacity for work. According to Elliot Jacque (1998) , a requisite structure is a hierarchy of roles in which:
- Every managerial role produces the level of work complexity that is 1 level higher than the level of work complexity produced by the subordinate roles
- No gaps and compressions exist in the delegation line
- Maximum level of work produced matches the level of direct output of the product/service of the company
KEY DEFINITIONS OF TERMS EMBEDDED IN THE REQUISITE ORGANISATION FRAMEWORK
The system of role relationships between the positions people hold in working together that establishes the boundaries within which people relate to each other.
The complexity in a role as measured by the time-span of discretion delegated to the role.
Time Span of Discretion
The time-span of discretion is the targeted completion time of the longest task or task sequence in a role. Time-span measures the level of work complexity in a role.
The Level of Work in a Role
The weight of responsibility felt in roles as a result of the complexity of the work in the role. The level of work in any role can be measured by the time-span of discretion of the tasks in that role.
- OBJECTIVES OF ORGANISATIONAL RESTRUCTURING
- To match employees to roles that allow for the maximum possible utilization of their capability.
- To design a cost-effective organizational structure that fits the complexity of your
- To identify the strengths and weaknesses of your overall organisational structure
- To identify the strengths and weaknesses of the functional organisational structures so as to determine the most cost-effective and strategic way to structure the departments to meet current and future needs of your organisation
- To provide clear recommendations on changes that will improve the effectiveness and efficiency of your organisation
- To clarify the roles, responsibilities and authority of management staff
- To eliminate duplication and overlap of responsibilities within the departments and between other departments;
- To improve the delivery and quality of services provided by your different departments
- To improve communication within and between departments
- To proffer plausible recommendations on changes that will improve the effectiveness and efficiency of your organisation
- STEPS INVOLVED IN REQUISITE ORANISATIONAL STRUCTURE DEVELOPMENT
Phase 1. Review and Analysis of your Corporate Strategy and your Business Model
According to Elliot Jacques a ‘requisite’ organisation starts with its mission from which flows its value and culture. He maintains that every organisation must embrace a number of core values, which are fundamental for the development of effective working relationships within the organisation. The corporate organisational structure, systems and principles must be consistent with the organisational values (Jaques, 1991).
Phase 2. Value Chain Analysis
Every company irrespective of its size is created to deliver a specific product/service that has a value to the market or society it serves. The value chains differ in the level of complexity depending on numerous factors like number of value chains, complexity of outputs, number of assets, geography of assets production or service delivery ( local, regional, national, international), operating revenue and the size of employment.
Phase 3. Mapping of the Business Complexity
An identification of the level of business complexity for the company is the foundation of requisite organization as all the other Requisite dimensions (Strategy, Systems, Structure, Staff) are aligned to the level of business complexity. According to Elliot Jacque (1991), there are 8 levels of business complexity. The central proposition of Jacques’ requisite condition for managerial leadership is that layering must be such as to ‘encompass successive categories of task complexity and of cognitive complexity within each stratum of organisation’ (Jacques, 1991). According to Elliot Jacques, companies are categorised into 8 levels of business complexity.
Phase 3. Strategic Assessment of all your Functional Business Units
This step involves the close analysis of each business unit’s strategy, strategic drivers and bottlenecks.
Phase 3. Comparative Analysis of the Manifest Structure against the Requisite Structure
The manifest structure depicts roles and reporting relationships between the roles as there are on the approved organogram of your organisation. The analysis of the manifest structure involves a closer look at:
- Span of control
- Reporting layers
- Manager to non-manager ratio
- One on One reporting
- Duplication of roles
The development of the requisite structure will be informed by the analysis of the manifest structure in relation to the aforementioned factors.
Phase 4. Measuring Levels of Work Complexity and Matching it to Human Capability
The level of work in a stratum, according to Jacques is the “target completion time of the longest task, project or program assigned to that role” (Jacques). According to the level of Work Complexity, work in organisations occur in distinctive layers of increasing complexity that can be easily distinguished from one another. The work required in each layer, called stratum is qualitatively different from work in another layer
Phase 5.Role Profile Analysis
This entails looking at the nature of work and how it is divided into roles. Each role will be fully analysed using a role description profile covering :
- Overall Purpose of the job
- Authority Levels
- Role Relationships(vertical and horizontal relationships)
- Knowledge/Skill Requirements
Phase 6. Determining the Current Capability Level of Employees
The current capability levels of employees can be determined through assessing the cognitive abilities and competencies of employees using scientifically proven methods like:
- Psychometric Tests
- Assessment Centres
- Personality Assessments
- 360 degree assessments
Phase7. Development of a Transition and Sustainability Plan
The sustainability plan will have the timeframe, action plan and the persons responsible for executing the action plans.
Given this background it is imperative for any progressive organisation to follow the steps alluded to above if you are to develop an effective and efficient organisational structure that is in tandem with your organisational strategy.
Elliott., Jaques (1998). Requisite organization : a total system for effective managerial organization and managerial leadership for the 21st century
Newturn Wikirefu is the Talent Acquisition Manager at Industrial Psychology Consultants (Pvt) Ltd a management and human resources consulting firm.
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