Structure should follow strategy: it exists to help the business achieve its objectives. A business pursuing rapid innovation needs a structure that encourages ideas to move quickly; one pursuing low cost and consistency needs clear control and standard procedures. When objectives change — growth, international expansion, a new product range — the structure often has to change too.
| Attribute | Why it matters |
|---|---|
| Flexibility | The business can respond quickly to changes in markets, technology and competition, without slow approval chains |
| Meeting the needs of the business | Clear lines of authority, responsibility and communication so that work is coordinated and decisions are made at the right level |
| Allowing for growth and development | The structure can expand — new divisions, regions or products — without becoming unmanageable |
| Encouraging intrapreneurship | Employees have authority and freedom to propose and develop new ideas (Topic 1.1.2) rather than being blocked by layers of approval |