Despite the powerful advantages, the trend at present is towards flatter, less rigid structures, cutting out layers of management and defining organizational boundaries and responsibilities less rigidly. Often, the primary motivation for such downsizing is the reduction of the overheads caused by superfluous layers of management. Gattorna and Walters (1996) note, however, that the traditional hierarchy may obstruct the implementation of customer service programmes. What, then, are the problems created by too rigid or elaborate a structure?
Promote internal focus
The fact that structures provide a means by which individuals or departments can obtain greater power or rewards than others in the organization can encourage staff to view the organization itself as their competitive arena, and to ignore the external environment. Managerial attention becomes focused on the struggle between departments for resources and prestige, whilst individuals pursue personal goals rather than those of the organization. Meanwhile, the business becomes further and further out of step with its customers and its competitors.
Obstruct information flow
The creation of formal lines of communication can actually obstruct the flow of information throughout the organization. Doyle (1994) argues that flattening the structure is a necessary stage in the development of a customer-orientated organization, since an extensive hierarchy creates communication barriers between the customer and senior management. Similarly, the segregation of groups of staff into different departments, each with its own objectives or performance targets, inhibits inter-functional coordination. Perhaps the most obstructive distinction, from the marketer’s point of view, is the distinction between customer-facing staff and those without a direct role in customer service. This creates the impression that the responsibility for satisfying customers resides with a defined group of staff, leaving the others free to focus on the work of the organization – such an attitude makes it difficult for customer orientation to permeate the entire business.
The existence of strictly defined procedures, lines of communication and responsibilities militates against responsiveness to customer needs. Research by Miles and Snow (1978), for example, suggests that organizations that focus on configuring internal structures for maximum efficiency – called defender organizations – are only effective in stable environments. The organizations that performed better in dynamic environments tended to have flatter, more flexible structures, with decentralised control. Called ‘prospectors’ by Miles and Snow (1978), these organizations are better able to adapt to changing conditions and new opportunities.
Inhibit inter-functional coordination
The sum effect of the disadvantages outlined above is to reduce the effectiveness and efficiency with which the parts of the business work together to meet the needs of the customer. Without such coordination, the RM programme will not be successful.