Organization Restructuring – Transforming from Traditional to Professional Organization Structure
Background and challenge
A promoter driven FMCG Player wanted to re-design its organization structure to strengthen operations with bring professional approach in execution and reporting lines. The client observed good market growth in preceding years, however, management functions were not improved to sync with the growth in operations. Client was struggling to up-keep its operational standards due to centralized management structure where 25 + officials were reporting directly to CEO.
Xcelion Advisory was approached to develop an efficient organizational model and transform organization with an effective Organization Restructuring Plan.
Approach
We started with a thorough diagnostic of the organization’s structure, existing business environment (functions, function owners and information flow), and developed functional flowcharts and current functional hierarchy trees. This helped in identifying overlapping reporting & functioning and areas of conflict of interest requiring review.
On the basis review a redesigned and simplified structure was suggested with clarifying decision roles for critical decisions. Under-mentioned recommendations were suggested to and accepted by management;
- Introduction of independent functions in the organization
- Introduce new positions with greater responsibility with matching authority
- Delegation of authority
- Product category wise profit centres
- Decouple overlapping functions like Production & Quality
- Sales re-organization based on distinct product category
- Centralized Purchase and Quality cell
- Concept of direct (primary) and indirect (secondary) reporting
Based on the accepted suggestions, Xcelion team developed a comprehensive stepwise restructuring plan for the Client.
Results
The client adopted the plan successfully and new structure increased the pace of operations with greater accountability of senior managerial functions. Direct Reporters to CEO were reduced from 25+ to 5+ thereby allowing CEO to invest more time in strategic activities.
