An important component to the success of any organization is the type of structure it implements. Organizational structure determines the number of layers of management and how departments interact with one another. Poor organizational structure can create a variety of problems, such as bloated management and poor communication.
Bad organizational structure can lead to poor communication. For example, a company with too many layers of management may experience misinterpretation of a directive as it is passed down from layer to layer. By the time the communication reaches workers on the front lines, it may have taken on a completely different meaning.
Some organizations use a reporting structure where an employee has to answer to several bosses. The employee can easily become confused by receiving a variety of messages and being given conflicting instructions. Employees may play one boss against the other, which can ultimately lead to friction between the bosses.
Organizations with poor organizational structure may not be able to provide efficient customer service, which can eventually lead to a loss of business. This can occur frequently in larger companies where there is little interaction between departments. A customer who calls in with a problem may be handed off from department to department because no one is sure who the right party is to handle the situation.
Companies with bad organizational structure are often slow to innovate. A pipeline for new ideas may not exist, and even if it does, poor communication may mean that the idea never reaches the right source for development and implementation. Consequently, workers who come up with new ideas may keep them to themselves or take them to a new employer.
Bad organizational structure does little to foster the concept of teamwork. Departments may be unwilling or unable to cooperate with each other, and workers within departments may not feel a sense of camaraderie. Workers may focus on their individual tasks and not offer assistance to others unless directed to do so by a supervisor.