Every organisation has an individual structure that provides coordination and control of the organisation’s activities. Organisational structures are complex and specific to the variables of the organisation such as strategy, industry, geographical location, government legislation, access to technology and funds for growth as well as many other variables of the organisation. They also need to be flexible and innovative to remain profitable in a competitive and globalised market, involving continual monitoring and change to the structure of the organisation. As an organisation’s components vary from one to another there can be no ideal or perfect organisational structure.
An ideal or perfect organisational structure is theoretical and designed based upon the goals and demands of the business at the time (Kroon, 1995). Goals of a business are derived from the organisation’s strategies which can be highly differentiated between different types of organisations from stock-exchange listed corporations to non-profit organisations. Microsoft is a listed corporation in a highly innovative field which today is managed as eight independent divisions, all with different strategies. In separating Microsoft to eight different divisions this allows for specialisation while also providing eight different structures with eight different sets of policies, procedures and management structures (Legerer et al, 2009). This shows that even within the one organisation a set structure is not suitable for all aspects of Microsoft’s business.
Theorists in the past have tried to identify the ideal organisation. Through this research all they found was that a structure that proved to be effective for one organisation was not for another. The outcome of their research proved that an organisation’s structure is dependent on “situational parameters” such as an organisation’s strategies, access to technology, size and the environment they operate within (Bartol et al, 2009). As stated earlier there are so many variables that set one organisation apart from another that no two can have the same “ideal” organisational structure.
The key assets to any organisation are the people that work within it. Some theories suggest that an organisation can be viewed as “a social community specialising in speed and efficiency in the creation and transfer of knowledge” (Kogut and Zander, 1996). In March of this year Rhys Andrews of Cardiff University in the UK, published a journal on the importance of “social capital” of organisations as well how this affects the organisation’s structure. This research focused on the organisation being managed in a way that provided opportunities to develop the relationships of the organisation’s human capital to harness the positive effects of these workplace relationships. The findings of this research indicated that a formal structure should be based around the people of the organisation rather than any pre-conceived ideology (Andrews, 2010).
One industry that has made dramatic changes over the past few years is the financial sector. The Global Financial Crisis had large scale impacts on the financial sector as a whole. Other changes this sector has seen involve regulatory, technological and changes in client behaviour. These changes have created some uncertainty around the financial sector and have had an impact on financial institutions’ organisational structures (Walter, 2010).
ANZ Bank is an Australian bank making large scale changes to its business, including expanding into consumer and corporate banking in China and other areas of Asia. ANZ is attempting to become one of the top foreign banks in China and open 20 new branches by 2012 (Euromoney PLC, 2009). This type of expansion strategy brings ANZ into a new business environment and would require organisational structure change to reflect this strategy. This expansion shows that due to the globalising nature of the financial industry organisational structure needs to be flexible. ANZ Bank’s structure will need to be aligned with this expansion strategy and continually monitored while the organisation evolves to ensure the implemented strategy and structure meets the intended (Zand, 2009)
Another Australian banking organisation that has currently undertaken a structural change is Westpac, having spent $18 Billion in acquiring St George Bank through a horizontal takeover. While both these banks have been successful under their current structure, CEO Gail Kelly has stated that due to the economies of scale a restructuring of several departments including IT, Human Resources, Risk, Finance and Marketing with be combined to cut costs. (Euromoney PLC, 2008). This example shows that even within the same industry, being the financial sector there are still differences in organisational structure, with no ideal structure for all financial sector organisations and as such no ideal structure for all organisations.
JP Morgan Treasury Services announced in July this year that is was “strengthening the organisational structure of its global trade practice” (Euromoney PLC, 2010). This “strengthening” included hiring several new senior managers and adding nearly 100 staff to the firm’s international team. In creating these new positions this created a new structure throughout JP Morgan’s entire global network. This expansion and structural change was completed to keep up with demand and in line with JP Morgan’s goal in becoming one of the world’s leading trade banks. As JP Morgan is a global organisation operating in areas such as Asia, North and South America, Europe, Africa and The Middle East, each location requires different policies and procedures as well as different internal structures to mould their organisation to local business culture (Euromoney PLC, 2010). This again shows there is no ideal organisational structure and that it is something that needs to continually evolve to keep up with the demands of consumers as well as suitability to its geographical location.
Technological advancements are a main factor in the continual innovation and growth of consumer products and how businesses operate. Through this continual evolution of technology, businesses also have to evolve and will always “need an organisation structure that fulfils the particular demands of the time” (Kroon, 1995). Two of the largest tech companies in the world, being Microsoft and Apple have undergone many changes over the past decade. This has included expansion in Research and Development to a combined figure of $79 Billion and the production of many new consumer products (Brodkin, 2010). As mentioned previously Microsoft has eight separate divisions with eight different structures allowing for specialisation. Apple also has separate divisions for every product range that the organisation provides and has been split into autonomous divisions since the late 1980’s (Pollack, 1988). The separation of such innovative companies allows for separate structure and procedures to focus on a set product or service rather than the organisation as a whole. As the world of consumer technology is such a continually rising industry these structures can be added to and modified, such as Apple’s creation of a new Ipod division and restructuring of the Macintosh division in mid 2004 (Markoff, 2004).
Other areas that force organisations to change how they operate and how they are structured are Government acts and legislation amendments. As shown on The Australian Legal Information Institute Website (2010)there have been many changes to legislation over time that focus on workplace relations, industrial regulations, changes in maternity leave and OH&S regulation. These plus many others all have effects on how a business is structured and how it operates. These Government acts can force organisational change through creation of new roles and departments or can lead to roles being modified and diversified.
Organisational structures are highly complex and cannot be rigid. As I have displayed above through examples of various organisations in differentiating industries and markets it can be shown that no two organisations structure there business the same way. An organisation’s structure is dependent on a large amount of variables such as goals, strategy, industry, market, geographical location, government legislation, access to technology and funds for growth as well as many other variables. The business world is also becoming a globalised market with Australian Banks branching into Asia and various foreign companies creating business within our own country. Through the continual evolution of consumer demands and the innovation of competitive business that supply to consumers, produces a continually evolving business model and a constantly changing organisational structure. An organisation’s structure is not perfect and due to organisations having incomparable and complex variables an ideal structure cannot suit all organisations.

Reference List
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