Determine the Degree of Structural Centralization

Identify the locus of decision making in your organizational structure.

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Without a focus on the degree of structural centralization:

  • An organization’s structure may not match up with the increasingly complex business environment.
  • Organizational functions may fall into an extreme of centralization and not align with the business strategy.

Determining a degree of structural centralization for your organization will:

  • Align the organization's structure directly to its strategic goals.
  • Help employees cope with business environments that are becoming increasingly more complex and uncertain.

Module 1: Identify Restructuring Strategy and Requirements

The Purpose

  • Gather organizational information that is necessary for a successful restructuring implementation strategy.

Key Benefits Achieved

  • Greater understanding of the organization and focus areas for restructuring.
  • Decisions that must be made to carry out restructuring are devised through collection of current inputs and outputs in the organization.

Activities: Outputs:
1.1 Identify business and function-level strategy.
  • High-level scope for a given function’s restructuring project.
1.2 Assess if drivers of restructuring align with strategy.
  • Determine if restructuring is warranted.
1.3 Determine structure design requirements.
  • Identify restructuring goals and criteria.
1.4 Determine high-level work activities.
  • Identify which work activities are necessary to support the function’s strategy and goals.
1.5 Determine function inputs and outputs.
  • Solid understanding of the functions interdependencies.

Module 2: Assess Degree of Centralization

The Purpose

  • Identification of the degree of centralization that is necessary in a restructuring effort.

Key Benefits Achieved

  • Established position on function-based centralization achieved based on decision making and culture.

Activities: Outputs:
2.1 Determine your current and future organizational degree of centralization.
  • Decision on degree of centralization.
2.2 Discuss where you believe the organization lies.
  • Assessment of current state.
2.3 Identify complexity and uncertainty.
  • Complexity and Uncertainty Checklist completed.

Module 3: Identify Locus of Decision-Making Control

The Purpose

  • Determine which authority is making decisions within the organization and find out to what degree of centralization these decisions lay.

Key Benefits Achieved

  • Clear illustration of authority level’s decision making based on a degree of centralization.
  • Ability to make changes in the Authority Matrix based on an initial inputs.

Activities: Outputs:
3.1 Understand what types of decisions need to be made in the organization.
  • Documented list of key decision points.
3.2 Identify decision-making authority.
  • Completed Authority Matrix template.
3.3 Stress-test your structure.
  • Conducted a final sanity check on the proposed degree of centralization.

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