What is the Best Organization Chart for Performance Management?

Dutch business executives and government administrators are digesting the findings of a recent research study about how to best organize departments, functions and divisions for the 21st century. The report, “The Emergence of the Multidimensional Organization,” from the Universteit van Amsterdam’s business school , revealed through field research with 40 Dutch organizations that there is a shift in thinking. Most firms or government agencie…

Dutch business executives and government administrators are digesting the findings of a recent research study about how to best organize departments, functions and divisions for the 21st century. The report, “The Emergence of the Multidimensional Organization,” from the Universteit van Amsterdam’s business school , revealed through field research with 40 Dutch organizations that there is a shift in thinking. Most firms or government agencies traditionally organize around a unit, sometimes a profit center concept, where managers have both authority and accountability for what they can locally control. But is this sub-optimal?

Economists have wrestled historically with determining the appropriate organizational structure for implementing business strategy. In the 1970s Professor Alfred D. Chandler of the Harvard Business School led the field with research and published articles that explored three S’s of management: strategy, structure and systems. He proposed guiding principles that organizations should highly value fit-to-market and fit-to-strategy tests. Businesses have constantly shifted organizational (i.e., human) structures to attempt to achieve better performance. Why might a new shift be needed? What role does information technology have to enable or accelerate this shift?
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