Thomas C. Schleifer, Ph.D.
This white paper focuses on traditional and functional organizational structures. It offers a simple and easily understood contrast and comment on the appropriateness of each approach. In contrast to the traditional structure, the paper, in its summary, concludes that a functional analysis of a firm’s operations can be “a tool for designing their organization going forward. It views a contracting company as a system of various inputs coordinated to create one desired outcome.”
The summary also notes that “Reorganization is not primarily a matter of better management of personnel, but more a careful structuring and measurement of the inputs needed to create the company’s desired outcome. It is designed to reveal inefficiencies and conflicts that prohibit efficient work flow. It enables management to measure the true cost of overhead for each contract and decide how to adjust activity or personnel to create efficiency.”
Reviewing a firm’s structure is especially important as market share increases, production/capacity is added or new markets are entered. The paper should be a useful tool for firms in such circumstances or considering actions that would increase market share, add capacity or enter a new market.