Get Instant Access
to This Blueprint

Hr Strategy icon

Determine the Degree of Structural Centralization

Identify the locus of decision making in your organizational structure.

  • With increasing globalization and the advent of technical innovations, organizations are changing the way they are structured at both the enterprise and functional level in order to adapt to new business realities.
  • Structural decisions are complex, and decision-makers are often under time constraints, which prevent them from fully considering the elements which would lead to a sustainable structure in the medium (three to five years) or long (five or more years) term.
  • Frequent organizational structure change can be disruptive to productivity, employee morale, and divert the focus of the organization from its primary mission, goals, and objectives.
  • Many organizational structures have organically evolved over time – they are not the result of intentional action. The wrong structures can delay decision making, impede communication and workflows, and negatively impact employee morale, resulting in costly overhead and waste.

Our Advice

Critical Insight

  • Restructuring is disruptive and may not result in a more effective function. Ask if you can meet your strategy through other means such as retooling processes, redefining roles, or realigning talent management tools.
  • No structure can operate at the extremes. A completely centralized structure with no flexibility is frozen. A completely decentralized structure with no control is anarchy.

Impact and Result

  • Identify an HR restructuring strategy and requirements based on the business strategy.
  • Assess current state and determine where decision making should rest, either locally or centralized, for a variety of HR functions.
  • The drivers of restructuring are largely internal, but organizations should refocus on external drivers to help cope with business environments that have become increasingly complex and uncertain.

Determine the Degree of Structural Centralization Research & Tools

1. Determine the degree of structural centralization

Determine stakeholders and develop strategic goals to align key inputs and outputs for the function being restructured.

2. Assess degree of centralization

Determine position on centralization then adjust position based on dominant organizational culture to find the degree of centralization.

3. Identify the locus of decision-making control

Review authority levels of each decision and create an authority matrix to establish decision-making points and reflect on the ideal degree of centralization.

4. McLean Academy Learning Snapshot

Watch this learning snapshot for an introduction to developing an organizational design.

About McLean & Company

McLean & Company is an HR research and advisory firm providing practical solutions to human resources challenges via executable research, tools, diagnostics, and advisory services that have a clear and measurable impact on your business.

What Is a Blueprint?

A blueprint is designed to be a roadmap, containing a methodology and the tools and templates you need to solve your HR problems.

Each blueprint can be accompanied by a Guided Implementation that provides you access to our world-class analysts to help you get through the project.

Need Extra Help?
Try Our Guided Implementations

Get the help you need in this 3-phase advisory process. You'll receive 4 touchpoints with our researchers, all included in your membership.

Guided Implementation #1 - Identify restructuring strategy and requirements
  • Call #1 - Discuss business and function-level strategy, and how to effectively align structure design requirements.
  • Call #2 - Review project scope and walk through function-level work activities.

Guided Implementation #2 - Assess degree of centralization
  • Call #1 - Review the results of the Centralization Diagnostic Tool.

Guided Implementation #3 - Identify locus of decision-making control
  • Call #1 - Discuss outcomes of authority matrix and address areas of confusion.


  • Dr. Richard Burton, Professor, Duke University, Partner EcoMerc, co-author of Organizational Design: A Step-by-Step Approach
  • Dr. Jay Galbraith, President and Founder of Galbraith Management Consultants and Professor Emeritus, IMD, Switzerland
  • Dr. Børge Obel, Professor at Aarhus University, Partner EcoMerc, Editor of Journal of Organizational Design, and co-author of Organizational Design: A Step-by-Step Approach
  • Dr. Naomi Stanford, Organizational Design Consultant and author of four books including The Guide to Organization Design: Creating High Performing and Adaptable Enterprises
  • Dr. Nicolay Worren, Organizational Design consultant in Europe and author of Organization Design