7.1.1—Objectives and structure

Organisational structure allocates authority, responsibility, communication and coordination. It should support the objectives and strategy rather than exist as an isolated chart.

Functional, divisional, matrix and flatter arrangements trade specialisation, speed, accountability and flexibility. The best fit depends on size, products, geography and uncertainty.

A diversified firm may use divisions close to customers, while a small specialist firm may benefit from direct communication and fewer layers.

A flatter structure is not automatically faster, and a matrix can create useful expertise as well as conflict.