Developing an effective organisational structure A Syngenta case study
Page 2: Organisational structure
To fulfil its mission effectively, a business needs to operate within a structure best suited to its purposes. Traditionally large businesses divide the organisation up into functional areas. Syngenta's functions include research and development, global supply (including manufacturing), human resources (HR), sales and marketing, finance, and Information Systems (IS).
Within any organisation there are likely to be several layers of authority. The number of levels depends upon whether the business has a hierarchical or flat structure. A hierarchical structure has many layers of management, each with a narrow span of control. Instructions feed downwards from one level of management to those below. Feedback comes from the lower levels upwards. The reporting system from the top of the hierarchy to the bottom is known as the chain of command. A hierarchical structure enables tight control. It offers clear opportunities for promotion and may reduce stress levels in both managers and employees. Everybody knows their place in the hierarchy.
However, communication can be a problem in hierarchical organisations. Without effective management, it can take a long time for information to pass up and down the chain of command. Staff may not be fully empowered. Rather than being able to use their initiative, employees may need to seek approval for every action from higher levels of managements. This not only can cause delay but also be bad for employee morale, reducing their motivation to work.
A flat line structure is one where there are few layers of management. Each manager has a wide span of control. This means a manager has responsibility for many people or tasks. Delegation is necessary for tasks to be carried out effectively. This structure gives employees more responsibility for their work. Communication is also faster up and down the layers. This enables problems to be solved more quickly.
The organisation chart shows a typical hierarchical structure in a commercial organisation. There are four functional areas. The accounts department has three layers of hierarchy: a director, a manager and three assistants. The accounts manager therefore has a span of control of three, as he or she directly supervises three assistants.
Syngenta is committed to empowering its staff and a hierarchical structure is not suited to its innovative style. Like many large businesses working in both national and international markets, Syngenta has adopted a matrix structure.
A matrix structure is often referred to as the project team structure. In this approach, team leaders manage specific tasks and projects. Each team will consist of members from different departments, each with their own specialisms and expertise related to the project. It takes employees out of their usual functional areas to work with other employees with different expertise and specialisms. This ensures the project has all the skills it needs to achieve its target. It also means the employees may benefit from each other's abilities.
Some teams are only formed for a short period of time. They disband when their projects have been completed and the team members are redeployed on other projects. Other teams have a longer or sometimes permanent remit. The matrix structure is not an alternative to functional management but works alongside it. Syngenta's project teams all support one or more of its business strategies.