Relationship between Business Objectives, People and Organisational Structure

Interconnection between Business Objectives, People and Organisational Structure

Business Objectives and Organisation Structure

Business objectives provide a direction to the organisation. They reflect the ultimate aim of all the activities that an organisation engages in.
Organisational structure is inherently influenced by the business objectives. These objectives dictate how the structure should be formed to ensure optimal functioning towards the achievement of these targets.
Different types of objectives may demand different organisational structures. For instance, a growth objective may require a more decentralised structure to encourage innovation, whereas a cost-cutting objective may prefer a centralised structure for tighter control.
Parameters such as ease of communication, coordination, control mechanisms and decision-making processes that determine the shape and functioning of an organisational structure are significantly guided by these objectives.

People and Organisational Structure

People form the most important asset of any organisation, and the organisational structure is built around them.
The organisation structure is designed in such a way that it can harness the skills, capabilities and potential of the people and direct them towards the achievement of business objectives.
A well-designed structure allocates roles and responsibilities evenly among people, creating a clear line of accountability and authority.
It also fosters collaboration and teamwork among people, facilitating better problem-solving and decision-making, which in turn, aids in achieving business objectives.

Business Objectives and People

Business objectives provide a common purpose that unites all the people in an organisation. It also provides them a sense of direction and purpose in their work.
People are also motivated by targets. Clear, well-defined objectives give them a measure of their progress and help achieve a sense of fulfilment when hit.
By involving people in the process of setting business objectives, organisations can not only boost their motivation levels but also gain valuable insights from the people who are on the front lines of business operations.

Interplay of Business Objectives, People, and Organisational Structure

Business objectives, people, and organisational structure are interdependent and their effectiveness is determined by how well they are aligned with each other.
A misalignment can lead to complications such as confusion in roles and responsibilities, inefficiency in processes, poor communication, unmet targets, low employee morale, and inability to achieve the business objectives.
Effective businesses recognise this and make sure there is a coherent alignment between their objectives, the capabilities and motivation of their people, and their organisational structure. This results in a high performing organisation that can adapt and succeed in a changing business environment.