The Four Pillars of Organisational Design – Structure

Welcome aboard our blog series, where we’re diving headfirst into the thrilling peaks and troughs of navigating STRUCTURE within the realms of Organisational Design!

In today’s fast-paced business landscape, maintaining a competitive edge is crucial.

Enter, Organisational Design, in any search engine and it will tell you that OD holds the key to keeping businesses nimble, adaptable, and primed for success. Whether it’s crafting the ideal structure, encouraging innovation, or refining essential skills, it serves as your guiding light on the path to sustained victory.

So, strap in and join us as we uncover the strategies, insights, and industry secrets of strategic Organisational Design in the ever-changing business terrain!

When it comes to organisational design, we should note that structure shouldn’t always the first thing to consider.

Here’s why:

  • Strategy Alignment: We need to make sure the organisation’s structure fits its goals and strategy – is a re-structure even necessary?
  • Culture and Values: The way people work together, and the company’s values are also an important factor to consider.
  • Processes and Workflows: How work gets done affects how the organisation is structured – it maybe more appropriate to look at your current processes first.
  • Technology and Resources: What tools and resources you h available also influence organisational design.
  • External Environment: Factors outside the company, like market trends and regulations, can also impact how the organisation is structured.

By looking at these factors together, we can create a design that best fits the organisation’s needs and goals.

If you are serious about looking at Organisational Design and would really value some pointers then arrange a call with us – 30 minutes of your time might be the difference it takes to get you in the right head space.

Let’s begin with defining STRUCTURE!

The structure model refers to how a company is organised and managed. It’s all about who does what, who reports to whom, and how information flows within the organisation. The structure outlines the framework that helps the company function smoothly and achieve its goals.

It can vary in terms of hierarchy, division of responsibilities, and communication channels, depending on the company’s size, industry, and objectives.

In this article, we’ll break down the following Operational Models:

Structure – The Operating Models


This structure is like the default choice for most leaders and businesses—it’s what everyone seems to lean towards. It’s familiar, it’s recognisable, and it’s pretty much the standard for a lot of organisations. Within this Functional model, we’re looking to cover all bases: geography, division, product, service line and how this impacts the business and ultimately your customer.

Now, why do people love this model so much? Well, it’s like the Swiss Army knife of organisational setups—it’s all about specialisation for employees while keeping things flexible enough to grow without breaking a sweat.

But, like everything in business and life, there are pros and cons.

On the plus side, it’s great for efficiency and stability. Departments can really hone in on what they do best.

But, on the downside, it can build walls between different parts of the organisation. Leaders need to make sure they’re not letting creativity slip through the cracks.

From the employee’s perspective, it’s a bit of a double-edged sword. Sure, they can get really good at what they do, but there’s a risk of them getting stuck in a rut, doing the same thing over and over again.

Let’s keep things spicy and make sure that creativity doesn’t get lost in the mix.


Alternatively, let’s explore the Matrix model, which offers a refreshing departure from traditional hierarchical setups. In a matrix organisation, teams have multiple leaders, encouraging open communication and driving innovation in product and service development.

This structure eliminates the need for frequent realignment with each new project, it promotes efficiency, and ensures continuity. Divisional managers or product specialists are able to focus on specific areas, enhancing specialisation and expertise within the organisation.

At first glance, this model may appear to have a lean management team, especially considering the size of the workforce. However, ample evidence suggests that it’s a winning strategy for many organisations. It’s certainly worth delving deeper, especially if you’re intrigued by the prospect of closer control and governance.

Imagine a cutting-edge tech firm specialising in software development. Typically, they follow a traditional setup where each department, like engineering, marketing, and sales, reports to its own Manager. But as they grow and branch into new markets, they see the value in a more dynamic agile approach.

So, they shake things up and introduce a matrix structure. They revamp their teams to include members from different departments, forming cross-functional squads. Instead of separate engineering teams for each project, they have a mix of engineers, designers, and marketers collaborating on specific tasks. Each team is led by a project manager who answers to both their department head and the project sponsor.

This new setup turbocharges communication and teamwork. Engineers tap into marketing insights directly, ensuring products meet customer demands. Plus, project managers have the freedom to call the shots without navigating through multiple layers of management, speeding up decision-making and action.

Overall, the matrix structure allows the company to adapt more quickly to changing market conditions, drive innovation, and deliver high-quality products and services to its customers.

Compared to the Functional operation model, the Matrix offers more flexibility and a balanced approach to decision-making. Managers can oversee multiple teams and products across the board.

Now, let’s talk about the pros and cons. On the upside, the Matrix brings increased efficiency and speed to the table, promoting teamwork within departments. However, the complexity of having managers juggle responsibilities across different areas can lead to confusion and frustration over who’s calling the shots.

In summary, although the Matrix model may seem to have a streamlined management approach at first glance, its capacity to encourage flexibility and fair decision-making renders it an appealing departure from conventional hierarchical systems.

While it enhances efficiency and teamwork, its intricacies may pose difficulties in defining roles and duties.

Nevertheless, for organisations in pursuit of innovation and flexibility, delving into the Matrix model may offer valuable insights.


Now let’s shine a light on the Flat Model. If you’re looking to trim down on management levels, this model could be just the ticket. If you find yourself questioning the necessity of middle management within your organisational structure, the Flat Model deserves your attention.

However, it’s crucial to note that removing this layer requires a well-developed structure with robust systems and processes in place, as it can introduce complications regarding approvals within the day-to-day operations.

On the bright side, adopting this model can help slash overhead costs, particularly in larger organisations.

While not widely adopted, it holds particular advantages for startups aiming to avoid early layers of management and instead empower managers with autonomy and trust to fuel business growth.

Consider this model if you’re embarking on your organisational journey, especially if you prioritise autonomy over a complex geographic structure that requires multiple layers of management.

For a Flat model, let’s consider a trendy startup in the fashion industry that adopts a flat organisational structure to promote creativity and innovation. In this company, instead of the traditional hierarchy with multiple layers of management, there are only a few levels of authority.

At the top, you have the founder or CEO, who serves as the visionary leader and sets the overall direction for the company. Below them are a small team of department heads or team leaders, each overseeing a specific area like design, production, marketing, and sales.

However, what sets this company apart is that these department heads are not traditional managers in the hierarchical sense. Instead, they act more like mentors or coaches, guiding their teams and facilitating collaboration.

Beneath the department heads are the teams themselves, composed of designers, marketers, salespeople, and other specialists. These teams work closely together, breaking down silos and sharing ideas freely. Decisions are made collectively, rather than being handed down from above.

This flat structure promotes a culture of empowerment, where every employee feels valued and has a voice in shaping the company’s direction. It promotes creativity and innovation, as ideas can flow freely without being stifled by red tape.

Overall, this flat organisational model enables a business such as our example, a fashion startup, to stay nimble, innovative, and competitive in a fast-paced industry, positioning them for long-term success and growth.


A hugely complicated model, known to many as the hub and spoke model. The advantages are that it is more focused, increases flexibility and drives lower costs as what tends to happen in the Network Model is some departments and services are in house whilst some are outsourced. An example of this is you may outsource the whole of your customer service department or even your HR operations.

A network structure model is an organisational framework that disperses authority and decision-making among interconnected nodes or units and gives greater flexibility to change processes on core functions. Unlike traditional top-down structures, this model prioritises collaboration, communication, and adaptability.

In a network structure, teams or departments operate with a degree of autonomy while promoting close connections with one another. This approach facilitates both agility and innovation, allowing for swift responses to external changes.

It’s often found in industries demanding quick adaptation, like technology and creative sectors. Teams will work on projects in an agile and ‘scrum’ type environment – breathing life into new innovative ideas and keeping ahead of the curve.

This model is a very complex one to follow and works particularly well in a manufacturing or retail organisation. It is one that is aspirational, however it does require a very strong leadership team to lead this effectively.

All sounds a bit overwhelming?

Are you ready to steer your ship through the review or creation of your HR strategy?

Let’s pinpoint where to focus, spotlight the latest market trends, and dissect how they’ll shape your strategy. If it would be of benefit to go through this with an OD expert, someone who can give you personalised next steps direction, the help is right here!

Dive in with us to exchange insights and supercharge your plan for maximum impact! OD is a exciting journey to explore – have a look at this OD Playbook to understand more – a super helpful tool for all efficiency seeking leaders.  

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