Rita Gunther McGrath [Archive.org URL]

I don’t think there’s any perfect organizational structure. But we tend, unfortunately, to perceive reorganization as a negative thing. Companies use structures as a means to an end—to coordinate activity, to capture and share information, and to get the right expertise to bear on the right problem. There’s nothing wrong with changing structure.

But there’s a nuance to it. In a fast-moving environment, structures that require very heavy information flows or that are very hierarchical are going to slow a company down. One of the tests that [George Mason University Distinguished Professor of Information Sciences] Paul Strassmann always uses when he looks at the information efficiency of an organization is how many information exchanges are needed to respond to a demand, such as a customer order or inquiry. More exchanges mean slower response time. That’s an interesting test of the fleetness of your organization.

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