Structural assessment 2

Complexity, formalisation and centralisation

 

This assessment is of three structural characteristics that impact on implementation: (1) occupational complexity, (2) formalisation of rules and procedures and (3) centralisation of power. It is important for you to assess the structure of the innovating unit (e.g., group, department, division and organisation) in terms of these variables because organisations with different combinations of these attributes will behave differently when initiating and implementing organisational change. You may, therefore, need to devise different implementation strategies depending upon your analysis.

Each of the three factors is described below. You will be asked to decide if your organisation is high or low on each. These variables will only have an impact in certain combinations and if they are relatively extreme. Therefore, if your organisation is moderate on the structural characteristics and you can not choose between high or low, or if one or more does not apply for some reason, this analysis will not be able to make any recommendations for your case. In that case, please be sure to conduct the first structural analysis provided above. Also please note that even if you can choose low and high on all three characteristics, there are certain combinations of the characteristics for which we can make no definitive predictions.

· Occupational complexity. The first characteristic has to do with the number of different occupational specialities in the organisation and is referred to as complexity. For example, an organisation high in occupational complexity will have, for example, engineering specialists and sub-specialists, as well as professionals in marketing, HR, sales, the law and more. Organisations low in complexity will have limited occupational diversity, all engineers for example. Is your organisation high or low in occupational complexity?

High
Low
1
2

Diversity in occupational specialities leads to more creativity and higher levels of innovation initiation. In terms of the implementation of those innovations, however, this diversity can lead to difficulty in achieving agreement and success.

 

· Organisational formalisation. Formalisation is the level of emphasis placed on following rules and procedures at work. Highly formalised workplaces have extensive policy and procedure manuals that must be followed. Firms with informal structures are less prescriptive in terms of how you do what you do. Is your organisation high or low in terms of formalisation?

High
Low
1
2

The more rules and regulations are used to govern organisational behaviour, the less likely an organisation is to consider innovating. However, with higher levels of organisational formalisation comes greater ease of implementation.

 

· Centralisation of power and decision-making. Finally, in some organisational structures all power over decision-making resides high up in the organisational hierarchy. Firms low in terms of centralisation of power and decision-making sometimes referred to as decentralised firms, devolve power to lower levels of the hierarchy. Is power and decision-making in your organisation highly centralised or decentralised (i.e., low centralisation)?

High
Low
1
2

The more power is concentrated in a few, top leaders, the less innovative the organisation is likely to be. However, low centralisation makes it more difficult to implement innovations.