Organizational Structure Analysis and Recommendation Report

This report analyzes the challenges of a flat organizational structure in a startup with 75 employees. The primary issue identified is delayed decision-making and increased conflicts due to the lack of departmentalization. The proposed solution involves dividing the organization into departments such as marketing, sales, IT, HR, and finance, each with a department head. This restructuring aims to improve decision-making speed, enhance coordination both within and between departments, and reduce conflicts. The report highlights the benefits of this approach, including clearer direction and improved customer service. While acknowledging the benefits of a flat structure, the report recommends departmentalization to address the specific challenges faced by the firm, ultimately improving overall productivity and efficiency.

Integrated management

Introduction
Management of employees, organizational culture, structure and policies is an important part of every
business. Change is the only constant in any organization and for the growth and development of the
business, it is imperative to adopt and embrace changes as and when they are required.
I work in a startup which makes mobile applications for corporates. Our firm is relatively small and
currently employees only 75 people. The biggest problem faced in the business is that of communication
and decision making. Since the organization is at its beginning phase, everyone associated with the
business has a high sense of ownership and hence takes part in the decision making process of the firm.
This is causing various problems like conflicts in communication and delayed decision making
Problem Statement
Delayed decision making and increased conflicts due to flat organizational structure.
Framework for analysis
A flat organization structure is being adopted by various organizations especially startups. However such
a structure works effectively for a smaller organization where the number of employees are relatively
less. For an organization of 75 people, a flat structure creates conflicts, delayed decision making and
slowed processes.
The proposed solution would be to divide the entire organization in different departments with one
department head. The departmentalization would include a marketing department, sales department, IT
department, HR department, Accounts and Finance department and customer relationship management
department. All the employees could be divided as per their qualifications and work expertise.
Departments with under ten members (like accounts department and HR department) would have one
department head while other departments would have 2 department heads. The remaining structure
would still remain flat. There are various advantages associated with such a structure.

Faster decision making
Decision making would be much faster as the department heads would discuss matters with their team
members and finally reach a decision for their department. Faster decision making would enhance the
overall productivity of the business.
Increased coordination
Coordination would increase because instead of collaborating with 75 people, now 6 departments
would require collaboration with each other. This would surely be a lot simpler process than before.
Increased coordination within departments would lead to better customer service and efficient delivery.
Less conflicts
When people communicate within their departments, the number of conflicts would also reduce. An
entirely flat structure also makes it difficult for an organization to manage conflicts. However, now it
would be the responsibility of the department heads to handle conflicts of their team effectively.
Clear direction
When teams are divided in departments, it would be easy to provide a single direction for the entire
department. The department heads would be the final decision makers and would be responsible for
effectively delegating responsibility within their department.
Conclusion
A flat organizational structure has various benefits like improved sense of ownership and transparency
in communication. However, in our firm, such a structure has more cons than pros. Therefore, it is
recommended to divide the firm in departments to enhance communication and improve decision-
making process.