Structure of an Empowered Organization

Empowered organizations stride forward fueled by the muscle of employees. Instead of management driving them, the employees themselves take the reins, working in teams that assume responsibility for projects and programs. This team approach gives the organizational structure of an empowered small business its name: the team organizational structure. To create a team structure, a small business owner must decentralize power, putting authority in the hands of employees.

A traditional organization controls work through a hierarchy of management layers. This bureaucracy has a strong chain of command and controls decisions from the top down. To empower employees, an owner must gut the hierarchy, transferring decision-making power to employees. Few managers remain. In a small business, the newly empowered company may use a structure of only two layers: the owner-manager and employees.

Traditionally, management layers create a vertically oriented structure. Managers have narrow spans of control – that is, they each manage few employees. Getting rid of management flattens the organization, giving an empowered organization a horizontal character. With employees taking on the managers’ former authority, remaining management – or, perhaps, the owner alone -- can oversee more employees for a wider span of control.

Teams take the place of the departments formerly used in the traditional structure. Instead of grouping employees into departments based on work functions – for instance, finance, research and marketing -- an owner brings together employees possessing different areas of expertise. A team might consist of marketing experts, researchers, people who know production and finance experts. The groups work together on projects, programs or to accomplish a company goal.

To empower an organization, it’s not enough for the owner to change the structure. For teams to succeed, the company must invest in their training. Employees must continue to grow within their own specialty, learn communication and conflict resolution skills, and become familiar with other areas of the company. Teams also need access to knowledge, which should be freely flowing throughout the company. The owner must share financial information, industry assessments and any other information that enables employees to analyze the effectiveness of their decisions.

Traditional organizational structures rely on rules and procedures to influence employee work and behavior. Employees who comply with rules and procedures produce acceptable, predictable work, which is desirable when products must be standardized. One drawback of this approach is employee passivity. After they are empowered, employees begin taking responsibility for outcomes. Creativity and innovation is used to solve problems and move the company forward. Such small businesses become dynamic and quick to react to changing external conditions. An empowered organization is a good fit for unstable or rapidly evolving market conditions.