the relationship between business objectives and organisational structure

7.1 Organisational Structure – Objectives and Structure 📊

What are Business Objectives? 📈

Business objectives are the goals a company wants to achieve – like reaching a certain profit, expanding into new markets, or improving customer satisfaction. Think of them as the destination on a road map that tells the company where it wants to go.

Types of Organisational Structure 🏢

• 🧩 Functional – Departments based on functions (e.g., Marketing, Finance).
• 🗂️ Divisional – Units based on products, regions, or markets.
• ⚙️ Matrix – Combines functional and divisional, with dual reporting.
• 🔄 Flat – Few layers of management, more autonomy.
• 📐 Network – Core company plus outsourced partners.

Linking Objectives to Structure 🔗

The way a company is structured should support its objectives. If the goal is rapid innovation, a flat or matrix structure may be best because it allows quick decision‑making. If the goal is cost efficiency, a functional structure can centralise expertise and reduce duplication.

A simple way to remember this is the equation: $\text{Structure} = f(\text{Objectives})$. The structure is a function of the objectives – it changes when objectives change.

Example: Startup vs. Multinational 🚀🌍

Key Takeaways 🎯

1. Objectives set the direction of the business.
2. The organisational structure is the vehicle that carries the company toward those objectives.
3. Changing objectives often requires a re‑structuring of teams, roles, or reporting lines.
4. Use analogies (road map, LEGO set, or sports team) to visualise how structure supports objectives.
5. Always ask: “Which structure will help us reach our goal faster, cheaper, or better?”