The greatest challenge facing business leaders in their drive for growth is complexity. That is the powerful argument in this interesting article from HR Magazine.
The basic argument is this - as a business grows it finds it hard to avoid becoming more complex; and complexity ultimately makes a business less competitive.
A firm that grows successfully usually goes through a process of significant change. More layers are added to the organisational structure; the process of decision-making becomes harder and slower; managers spend increasing amount of time co-ordinating rather than thinking or innovating.
The process of increasing complexity was worst during the good times, when firms and management were faced with so much opportunity for growth that it was convenient for them to ignore (or hide) the organisational inefficiency they were creating by growing.
The article picks out organisational structures with too many layers (tall structures) as being indicative of firms that have grown too complex:
“Layer upon layer of management resulting in bottlenecks, which create a detrimental effect not only on the financial operations of the organisation but also for human resources. Of course organisations need rigorous standards and cross-checks in their systems and processes, but they also need room for discretion, innovation, creativity and empathy - that very real human element which makes the most tremendous difference in successful companies.”
The solution? Keep things simple and avoid organisational complexity at all costs.
“Coordination, collaboration and communication are the key elements of radical simplification….delegate, hire, eliminate”
This is a key evaluation point for business students, although one that too few make in exam answers. A simple starting point for ways in which a business can improve its competitiveness (and profitability) is to address complexity in the organisational structure.
FOR MORE REVISION SUPPORT FROM THE TUTOR2U TEAM...
Use the following class codes to join our Zondle revision classes:
Economics: AS Micro 290-66327 AS Macro 290-66328 A2 Micro 290-66329 A2 Macro 290-66330
AQA AS/A2 Business: BUSS1 290-66325 BUSS2 290-66326 BUSS3 290-66323 BUSS4 290-66322
The cameras went behind the scenes at one of tutor2u's exam coaching & revision workshops this summer...
Discover more about our intensive exam coaching & revision workshops desiged to prepare for exams in May & June 2015:
|PowerPoint Lesson Activities||Teacher Conferences & CPD Courses|
|Exam Coaching & Revision Workshops||Pre-release Case Study Toolkits|
|A Level Economics Teaching Support||Resources for Business Studies|