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Chapter 4 Structure and Restructuring

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A crisis over journalistic standards ensnared the British Broadcasting Corporation (BBC) in a flurry of parliamentary hearings, resignations, and public recrimination in 2004. The controversy so tarnished the respected institution's reputation that top officials took major steps to ensure that it would never happen again. The bevy of corrective changes included a journalism board to monitor editorial policy, guidelines on journalistic procedures, forms to flag trouble spots that managers were required to complete, and a 300‐page volume of editorial guidelines. The cumulative effect of the changes was a multilayered bureaucracy that limited managerial discretion and fostered a pecking order of approve‐disapprove boxes that were passed up the chain of command as an alternative to asking probing questions at lower levels in the organization.

Some cures make the patient worse, and this newly restructured system resulted in two crises more damaging than the first. In October 2012, the BBC came under heavy fire when it broadcast a glowing tribute to a well‐known former BBC TV host, Jimmy Savile, but killed an investigative report detailing evidence that Savile had been a serial child molester.

Reorganizing, or restructuring, is a powerful but high‐risk tactic for improving organizations. Also in 2012, the BBC aired a report wrongly accusing a member of Margaret Thatcher's government of being a pedophile. Post‐mortem investigations attributed this error and the Savile one directly to the BBC's restructured, highly bureaucratized system. Major initiatives to redesign structure and processes often prove neither durable nor beneficial. Designing a structure, putting all the disparate parts in place, specifying their connections and satisfying every interested party's interests is difficult and risky. Although restructuring is one of the most popular management strategies for improving performance, and more than half of new CEOs implement a reorganization in their first two years on the job (Blenko, Mankins, and Rogers, 2010), Boston Consulting Group (2021) reports that “more than half of companies rate their reorganization initiatives as ‘mostly’ or ‘very’ unsuccessful.”

But it is also true that, over the past 100 years, management tools like strategic planning, decentralization, capital budgeting techniques, and self‐governing teams have done more than any other kind of innovation to allow companies to cross new performance thresholds (Hamel, 2006). As an example, American automakers scratched their heads for 20 years trying to figure out what made Toyota so successful. They tried all kinds of process innovations but finally reached the conclusion that Toyota had simply given their employees more authority to make decisions and solve problems (Hamel, 2006).

An organization's structure at any moment represents its unique resolution of an enduring set of basic tensions or dilemmas, which we discuss next. Then, drawing on the work of Henry Mintzberg and Sally Helgesen, we illustrate two views of options organizations may consider in aligning structure with mission and environment. We conclude with case examples illustrating both opportunities and challenges that managers encounter when attempting to create more workable and fruitful structural designs.

Reframing Organizations

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