The structure of an organization has a paramount influence on the creation and sharing of knowledge
The way in which an organization is structured sets the tone, the environment, and ultimately the culture of a workplace.
This has a direct bearing on how comfortable employees are at work.
The relationship between departments in a company has a significant, if not game-changing, impact on the way a company operates and whether it will be successful.
Let’s see how different relationship setups affect knowledge sharing within a company.
Impact of Structure on Knowledge Sharing
There are three main schools of thought on how to structure an organization.
The traditional way, the one which is used by the majority of companies, is the functional structure. This breaks a company up into specialized groups: e.g. marketing, sales, engineering, HR.
A second method, popular among large companies, is the divisional structure. This breaks a company up into semi-autonomous business units, each responsible for its performance in producing certain products, or serving certain geographies or customer segments.
Functional and divisional structures are often ‘top-down’ environments where upper management make most of the important decisions. Since employees are not expected to be creative or generate new ideas, these companies tend to be less innovative and responsive to customer feedback. However, they also tend to be more operationally efficient, like a well-oiled machine, allowing for lower production costs. This is an ideal structure when the business environment is stable.
A more recent approach, popular among startups, is the flatarchy (also known as the “collaborative approach”). This structure flattens the hierarchy and gives employees a lot of autonomy.
Companies that adopt a collaborative approach tend to be more creative, flexible, and faster to adapt to changes in the business environment. Since employees are given a great deal of freedom to control the way they work, there tends to be higher morale, and lower rates of employee turnover.
Unity of Command
This is a tried and tested organizing principle where every employee has only one manager. This creates a simple hierarchy, well defined management roles, and clear areas of responsibility.
Information flows mostly along hierarchical lines. The simplicity of the structure can increase the speed of communication. However, if there are too many layers of management this may lead to miscommunication as well as slower transmission of information. Middle managers may pass to upper management only information they deem relevant, while inserting their own additional instructions to junior managers and employees.
If departments working alongside each other share information openly, teams with differing responsibilities that produce information helpful to one another can work together toward a common goal. During this interaction, additional knowledge is more easily created. In addition, morale tends to greatly improve as employees experience greater camaraderie, discover a more profound purpose in their daily tasks, and feel an increased sense of accomplishment.
Departments as Silos
All too often, departments act as isolated silos. This means they are not working together and instead narrowly focused on carrying out their individual tasks. In this situation, less information is shared, creativity decreases, and morale is adversely affected [pdf].
The siloed approach occurs because interdepartmental communication is difficult. It requires trust and mutual cooperation. If one side cannot see the value of sharing knowledge, communication will reduce, less ideas will be generated, and the organization’s productivity or ability to reliably create value for customers will be impaired. As a result, the organization may find it more difficult to sustain a competitive advantage in its industry.
The remedy for a siloed approach is to educate department managers and the workforce on the benefits of communication and collaboration between departments, to create opportunities for networking and informal interaction, and to encourage relationship building between departments.
Company Culture
The culture of an organization establishes the tone of the workplace. Shared values, language, and behavioral norms can create an atmosphere in which people have a sense of purpose and a feeling of ownership over the work they collectively do. This can produce the intrinsic motivation needed to drive the organization forwards to achieve its goals.
One way to enrich company culture is to improve the flow of information. In a supportive company, with an open door policy, managers welcome employee communication, feedback, and discussion on any topic that is important to an employee. If employees feel that management is listening, this is likely to foster an environment of trust, boost morale, and make employees feel more relaxed and empowered. If employees feel comfortable at work, then they will be better able to focus on important tasks, reduce silly mistkaes, and increase productivity. They are also likely to be more creative.
Improving the flow of information in small ways can lead to much larger increases in communication. As ideas are created and shared, this can create an atmosphere of open communication in which people become more willing to share knowledge with managers, colleagues, and direct reports.
Final Thoughts
Organizational structure has a direct impact on information sharing, which influences operational efficiency, value creation, and innovation.
The siloed approach to work often creates gaps in communication and reduces knowledge sharing between departments [pdf]. This can reduce the speed and quality of decision making which can lead to lower performance and profitability.
An open, more collaborative approach, where each department freely shares its knowledge has the potential to produce more informed decisions.
Joe Peters is a Baltimore-based freelance writer and an ultimate techie. When he is not working his magic as a marketing consultant, this incurable tech junkie devours the news on the latest gadgets and binge-watches his favorite TV shows. Follow him on @bmorepeters
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