Organisational Structure and Management Innovation at Telstra (HM2022)

This report examines the organizational structure of Telstra, a leading Australian telecommunications company, and its impact on management innovation and overall business performance. It begins with an introduction, background of Telstra, and an overview of its organizational structure, strategies, and potential reasons behind them, including the T22 strategy. The report analyzes how Telstra's centralized structure influences innovation, considering factors like employee empowerment and resource allocation. It then assesses the impact of this structure on Telstra's business performance, highlighting operational efficiency, cost reduction, and adaptability. Finally, the report offers recommendations, such as adopting a hybrid organizational structure, to enhance performance and foster innovation within Telstra, concluding that a strong, adaptable structure is crucial for long-term success.

Running Head: MANAGEMENT 0
Organisational structure and effectiveness

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Table of Contents
Introduction of the report.......................................................................................................3
Background of Telstra.........................................................................................................3
Overview of the Telstra organisational structure, strategies and possible reasons...........4
Impact of Telstra structure on management innovation......................................................6
Impact of Telstra structure on overall business performance.............................................8
Recommendations....................................................................................................................9
Conclusion...............................................................................................................................10
References...............................................................................................................................11

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Executive Summary
This report is intended to identify and evaluate the impact of organisational structure
on management innovation and performance. To analyse this impact practically,
Telstra organisation has been selected which is one of the Australia leading
Telecommunication Company founded in 1975 and providing wide ranges of
services. The company offers various types of services include internet data, voice
calling, messaging, broadband and other product and services.
The report starts with brief introduction of the report including background of the
company followed by explaining its various elements of organisational structure and
strategy. In the further section, the impact of Telstra organisation structure on
management innovation and organisational performance has been identified.
Ultimately, in the end, several recommendations are also be given on the way how
Telstra can improve innovation and performance.

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Introduction of the report
The construction of organizational structures, which create cross-functional
information and distribution of resource possible, is a vital element for business
firms; guaranteeing planned decision-making, the answer to variances, and the
effective harmonisation of innovation progression. Tran and Tian (2013) defines
organizational structure as a continuous delivery of administrative mechanism and
work roles to assist an organisation to manage, act and regulate its organisational
resources and flow of activities. The two elements of organisational structure i.e.
formalisation and centralization are expected to have an influence on innovative
yields (Janicijevic, 2013). This report discusses the practical knowledge of
organisation structure having a significant impact on business strategies and
structure in relation to management innovation and overall performance. In addition,
it also discusses several essential recommendations to Telstra on the way how it can
enhance its performance and innovation.
Background of Telstra
One of the biggest Australian telecommunication company Telstra offers various
sorts of services including voice, data, cell phone, broadband and other products and
services. The mission of the company is to form technological content and

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resolutions effectively used by major classes of customers. Telstra also maintains its
global presence with having its operations in more than 20 countries. In 2018, the
net profit of Telstra was stood at $3.53 billion (Pash, 2018). The major competitors of
Telstra in Australia are Optus and Vodafone Australia.
Overview of the Telstra organisational structure,
strategies and possible reasons
The organisational structure is significant for any developing corporation to offer
readability and steerage on detailed human resources concerns parallel to
administrative influence. In relation to Telstra organisation structure, different
departments of the company are allocated to handle different responsibilities. In
2018, Telstra had 32, 293 staffs in Australia including employees from all holdings
under the mechanism of organisation (ibisworld.com.au, 2018). They are responsible
for serving various consumers, small business and enterprise departments.
Considering the distribution of authority, company is more inclined towards the
centralized approach with administration and thus employee’s ideas and thoughts
are positively welcomed in the company.
However, in 2018, Telstra announces a new organisational structure to deliver its
2022 strategy which has seen the organisation to reduce costs and enhance
consumer experience so as to plug $3 billion earning hole (telstra.com.au, 2018). It
will also simplify its operations and product set while reducing the product base. The
diagram of Telstra new organisation structure and the Group Executive team is
shown below –

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Source: (telstra.com.au, 2018b)
The key strategy related to this organisation structure is to eliminate management
layers and complexity, reduces the emphasis on hierarchical decision making and
raise the effort on empowered groups developing choices closer to the consumer.
The company also believes that technology and product will drive an integrated
product and technology for all of the business to offer simple and innovative product
understandings that help in gaining larger market share with driving profitable growth
(telstra.com.au, 2018b).
In their recent media statement, Telstra also establish new strategy to enhance
consumer involvement in relation with organisation structure. It is based on four key
pillars starts with completely streamline their product offerings, remove consumer
pain points and build a new digital experience (telstra.com.au, 2018a). The second
pillar is setting up a separate infrastructure company to boost performance. The third
pillar is highly simplifying their structure and way of functioning to motivate their
staffs so as to assist the consumers in an effective way. The fourth pillar includes
industry leading cost fall plan and managing of portfolio. Hence, the new strategy is a

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part of an initiative to continue aligning the organisation structure with consumer
needs and its corporate strategy.
Impact of Telstra structure on management
innovation
Business decision makers have the authority to stimuli innovation within their
corporation with the help of direct control of the organization structure. Innovation
can be assumed as management procedure and new structures, guidelines,
strategies, agendas, new procedures of manufacturing, new service and products
formed in an organisation (Zheng, Yang and McLean, 2010).
The organisational structure of Telstra has over the years able to add positively to
the innovative decisions taken out by the firm. An enterprise corporate structure can
bring about company growth and also develops blockades in the path of organisation
development. Telstra has a centralised organisational structure which can be termed
as hierarchical including various functional managers. The business structure at the
uppermost level comprises of 9 senior executives report straightly to CEO. To pull
out more innovation, Telstra capitalised more than $1200 to each staff in building
main business skills like strategic planning ad thinking, driving change, corporate
partnering, and mentoring (employerofchoiceawards.com.au, 2016). In the first half
of 2016, more than 220,000 learning courses were completed by overall employees.
As Telstra has a centralised organisational structure, power is allocated in
organizational hierarchy and also staffs are fortified to participate in the decision
making process. This allows Telstra to gather various creative and innovative idea
considering employees thoughts and involvements. When an organisation is
centralised, senior level management can effectively organise and integrate

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resources and knowledge so as to lower the costs with fostering innovation and
competence (Katsikea et al, 2011). In addition, Telstra ensures that its organisational
structure can undertake better collaboration and commitment in job roles while
assisting in the effective delivery of information within the organisation and brings a
higher innovative output.
Considering the 2018 annual report of Telstra, Telstra has formal governance and
structures in place to ensure the transformation risks and changes are firmly
recognised and administered. In enterprises with a great degree of primness, wide-
ranging rules exist drawing the accountabilities and objectives of each associate of
organisation. It is projected that these directions will be firmly followed to, and it is
tough for such people to disrupt away from monotonous actions and existing
structural behaviours. Cosh, Fu and Hughes (2012) stated that a company structure
grounded on formal management may upsurge ground-breaking performance by
empowering harmonisation amid diverse operational units, raising the level of cost
efficacy, reducing vagueness and errors.
Hence, it is cleared above that how Telstra pulls innovative practices through its
organisational structure helping the organisation to gain competitive edge in the
telecommunication industry. From future perspective, such organisation structure will
boost the company internal operations and ensure greater collaboration of top
executives and each and every employee.

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Impact of Telstra structure on overall business
performance
The way in which an organisational structure is set up and managed can have a
direct influence on the companies’ productivity and performance. Telstra has a
formal organisational structure as stated above and it provide guidance to all
personnel by laying out the official reporting association that controls the
organisation workflow. In the absence of a formal organisational structure,
workforces in Telstra may found challenge that which superior they need to reach in
various situations and therefore, it will be uncertain to know who has the ultimate
charge of what. Hence, organisational structure of Telstra enhances operational
efficiency by offering clarity to staffs at various stages of the organisation and
ultimately, this increases the business performance. In addition, while being attentive
to the organisational structure, departments can function more in a holistic and
synchronised way with focusing of energy and time on productive tasks. At the end,
a systematically charted structure can also offer an holistic view for inner growth,
enabling organisations to develop solid employee development pathways for each
level personnel.
The business performance of Telstra also gets boosted with the hierarchy of decision
making in the Telstra organisation structure. As Telstra has a centralised
organisation structure, some of the major advantages that lead the company to
increase in business performance include reduction on cost where the standardised
procedure help Telstra to reduce various costs and emphasize more on
departmental operations and responsibilities. The business performance is also gets
boosted with uniformity in action which is incorporated throughout the enterprise as

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of central administrative control (Huang, Kristal and Schroeder, 2010). Centralization
in organisational structure of Telstra also promotes and allow personal leadership
that helps the management to facilitate quick actions and achievement of pin-pointed
purpose or objectives. At last, the centralised organisation structure of Telstra also
permits adaptability and flexibility that help the organisation to change its plan and
policies as per the variations in the external business environment. Hence, when a
clear structure presents people performs better, tasks are distributed and productivity
is improved. Indeed, Telstra focuses on long term success with having a appropriate
structure in place, one that identifies and address many individual and business
realities of the enterprise. Considering all, it brings out greater job satisfaction and
synchronises individual with the organisation goal, therefore, leading to increase
business performance from various perspectives.
Recommendations
The structure of an organisation can help the organisation to gain progress towards
its goals independent of size and industry and Telstra can also achieve this by
properly matching and coordinating needs with the structure they use to operate. To
increase performance and emphasis on innovation, Telstra can adopt hybrid
organisation structure (i.e. combination of both divisional and functional structures).
Its diverse features enable Telstra to be more flexible while assigning and
distributing roles and therefore leads to maintain healthy relationships across all
department. Under this strategy, the corporate strategy of the company will
effectively be connected with the innovation strategy of each business units. Some of

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the top companies who using such hybrid structures include Google, Starbucks and
GAP Inc and this show the perfect example.
Today, companies that are implementation adjustment and trailing innovation are
also focused on making smaller and more agile teams. Such teams are able to follow
edges without meeting continuous blockades. Hence, adopting this way also help
and benefit Telstra to increases its business performance as well as facilitate
management innovation.
Conclusion
This business report looked into different aspects relating to organisation structure
and specifically about Telstra. Telstra organisation structure is discussed with
support of relevant theories, concepts and arguments and the main purpose of this
report is to analyse the impact of organisational structure and management
innovation and performance. Through this report, organisation structure of Telstra is
better understood with its new changes due to T22 strategy in the future. It is tried to
reach a conclusion that centralised and formal organisational structure plays an
important role in increasing business performance and facilitating management
innovation. In addition, a strong organisational structure that is formed to develop
with the organisation can sustain corporate productivity for a longer period of time
and allow business to change its structures with coordination of various factors and
elements in the external business environment.

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References
Cosh, A., Fu, X. and Hughes, A. (2012) Organisation structure and innovation
performance in different environments. Small Business Economics, 39(2), pp.301-
317.
employerofchoiceawards.com.au. (2016) Employer of Choice Awards [ONLINE]
Available from: https://employerofchoiceawards.com.au/2016-winners/telstra-2016-
eoc/ [Accessed 24/09/2019].
Huang, X., Kristal, M.M. and Schroeder, R.G. (2010) The impact of organizational
structure on mass customization capability: A contingency view. Production and
Operations Management, 19(5), pp.515-530.
ibisworld.com.au. (2018) Telstra Corporation Limited - Premium Company Report
Australia [ONLINE] Available from: https://www.ibisworld.com.au/australian-
company-research-reports/information-media-telecommunications/telstra-
corporation-limited-company.html [Accessed 24/09/2019].
Janicijevic, N. (2013) The mutual impact of organizational culture and
structure. Ekonomski Anali/Economic Annals, 58(198).
Katsikea, E., Theodosiou, M., Perdikis, N. and Kehagias, J. (2011) The effects of
organizational structure and job characteristics on export sales managers’ job
satisfaction and organizational commitment. Journal of World Business, 46(2),
pp.221-233.
Pash, C. (2018) Telstra's full year profit is down 9% [ONLINE] Available from:
https://www.businessinsider.com.au/telstra-full-year-profit-8-2018-8 [Accessed
24/09/2019].