Organizational architecture is a set of plans that define a business and its internal structure. It can be built in different ways, such as distributed, vertical, or networked. Companies may need to review and change their architecture in response to changing market conditions or technological advancements, but this can cause disruptions and confusion.
Organizational architecture is a business term that refers to a set of plans that define a business. It describes the internal structure by which an enterprise brings together personnel and procedures into a productive medium of commerce. Also called business model, it defines the means that the company uses to express itself as an organized system.
Just as an architect erects a structure for a productive purpose through the drafting and execution of a series of plans, a company builds corporate architecture. The way the architecture is built reveals how the compartments are arranged within the company. Companies often describe this architecture in a flowchart. This illustration also reflects how authority works within the organization.
Sometimes an architect may choose to construct a building using a distributed loading technique along horizontal beams. Similarly, a company may choose to build a distributed organizational architecture. This method distributes authority horizontally within a department.
Vertical organizational architecture is a top-down flow of authority. A manager or managers supervise and direct the work of employees in a hierarchy. A networked model is another form of organizational architecture. Also called team architecture, it is often used to build a collaborative working model.
A company can rebuild its business architecture in response to changing market conditions. If so, the company will first carry out a review, noting how workers are grouped, what functions are performed, and how authority structures operate within the company. Supply chain and distribution networks are also part of the organizational architecture.
The enterprise architecture may have been erected piecemeal over a period of time. This can result in areas where organizational structures hinder the company’s goals. Changing authority structures within a company is not a task to be taken lightly. Disruptions for staff members and executives can be psychologically overwhelming when long-standing routines and well-established relationships undergo significant change.
Often a company will change its architecture piecemeal. This disadvantage is the same as renovating a building. There will be construction debris, metaphorically, in terms of confusion about authority roles and structures. This confusion clutters the workplace and will likely impact the company’s operational efficiency during the transition.
Sometimes a major organizational architecture overhaul may be necessary. Technological changes may be the trigger for that change. Gradual changes in enterprise architecture can result in a greater degree of responsiveness to the macro environment.
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