Structural context is the context designed into organizations. It largely describes things like span of control, decision-making authority, and distribution of resources. It also reflects the stated values of the organization’s leaders on such things as risk taking, empowerment, customer engagement, and employee satisfaction. Organizational members typically have a common interpretation of the structural context but the effects can be difficult to understand because it often reflects what organizational leaders say they want – not necessarily, what they are actually producing.
A simple example
All organizations have some type of organizational structure most often depicted by an organization chart. For the most part, organizations are explicitly designed and often a lot of thought goes into that design. Analyzing a detailed org chart can reveal a number of contextual clues about how the organization functions. One contextual element is span of control. On one end of the scale are deep organizations with many layers of management and on the other end are flat organizations with fewer layers. The question is, “what context does each of these organizational styles create?” I am going to use the ends of the scale to contrast the contexts but most organizations are somewhere in between.
Deep organizations are characterized by narrow spans of control. Overall, managers control fewer people and have smaller budgets than in flat organizations. Power is concentrated at the top of the organization and most decisions need higher-level approvals. These organizations employ bureaucratic processes around things like budgets, resource allocation, discretionary spending, and decision-making. This type of context works well where process adherence is important or tightly choreographed action is required. A good example of this structure is the U.S. military.
The context created in this type of organization discourages creativity, innovation, and independent action. Success comes from being excellent at following the rules and making the system work for your initiative.
Flat organizations are characterized by broad spans of control. Managers have more reports, larger budgets, and control more resources in general. Employees have a great deal of autonomy and decisions are made close to where the need arises. This type of context works well where people are geographically distributed, creativity and innovation are required on a regular basis, and speed is a primary driver. Google is a good example of this context.
Flat organizations create a context that can be difficult to understand and leverage due to its lack of consistent structure. Success comes from taking initiative and personal risk to advance your initiative.
Structural context is the easiest of the three context types to understand as most of it comes from explicit design and management direction. The parts that can be hard to grasp are the unintended consequences of the design. For example, a compensation system that rewards only individual behavior often leads to internal competition. The competition might be thought of as part of the cultural context but in fact, it is designed in.
The bottom line:_______________________________________________________________________________________________
The structural context is designed into the organization through the organizational structure, budget mechanisms, hiring practices, performance evaluations, and other organizationally related structures and processes. Understanding the design intent, the unintended consequences, and the impact on your initiatives is critical for your success.