Delayering 1.4.3
Delayering - flattens an organisational hierarchy by removing levels of management.
Organisational structures are dynamic - they change! Indeed a business that doesn't regularly assess how effective its organisational structure may find itself becoming noncompetitive.
Delayering involves removing layers of management from the hierarchy of the organisation. Normally it means reducing the middle managers.
Frequently, the layers removed are those containing middle managers. For example, many high-street banks no longer have a manager in each of their branches, preferring to appoint a manager to oversee a number of branches. Some schools adopt this policy too – with a director of studies looking after several schools in a local area.
Delayering does not necessarily involve cutting jobs and overheads. But it does usually mean increasing the average span of control of senior managers within the business. This can, in effect, chop the number of layers without removing a single name from the payroll, as the people affected are moved elsewhere in the business.
However, it is fair to say that, increasingly delayering is seen as a way of reducing operating costs, particularly as a response to the economic downturn.
ADVANTAGES TO DELAYERING
Organisational structures are dynamic - they change! Indeed a business that doesn't regularly assess how effective its organisational structure may find itself becoming noncompetitive.
Delayering involves removing layers of management from the hierarchy of the organisation. Normally it means reducing the middle managers.
Frequently, the layers removed are those containing middle managers. For example, many high-street banks no longer have a manager in each of their branches, preferring to appoint a manager to oversee a number of branches. Some schools adopt this policy too – with a director of studies looking after several schools in a local area.
Delayering does not necessarily involve cutting jobs and overheads. But it does usually mean increasing the average span of control of senior managers within the business. This can, in effect, chop the number of layers without removing a single name from the payroll, as the people affected are moved elsewhere in the business.
However, it is fair to say that, increasingly delayering is seen as a way of reducing operating costs, particularly as a response to the economic downturn.
ADVANTAGES TO DELAYERING
- It can reduce costs as fewer (expensive) managers are required
- Faster decision making
- It can improve communication within the business as messages have to pass through fewer levels of hierarchy
- Stimulating employee innovation
- It offers opportunities for better delegation, empowerment and motivation as the number of managers is reduced and more authority passed down the hierarchy
- It can remove departmental rivalry if department heads are removed and the workforce is organised more in teams
- It brings managers into closer contact with the business’ customers – which should (in theory) result in better customer service
- Not all organisations are suited to flatter organisational structures - mass production industries with low-skilled employees may not adapt easily
- Delayering can have a negative impact on motivation due to job losses, especially if it is really just an excuse for redundancies
- A period of disruption may occur as people take on new responsibilities and fulfil new roles
- Those managers remaining will have a wider span of control which, if it is too wide, can damage communication within the business. There is also a danger of increasing the workload of the remaining managers beyond that which is reasonable.
- Delayering may create skills shortages within the business – a danger is that delayering means that the business loses managers and staff with valuable experience
- Can cost additional costs to restructure the organisational hierarchy and not save as much as initially thought.
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