What is organizational architecture?

Vertical organizational architecture involves a top-down flow of authority.

Organizational architecture is a business term that refers to a set of plans that define a business. It describes the internal structure through which a company brings together employees and procedures in a productive medium of commerce. Also known as business modeling, it defines the means that the company uses to express itself as an organized system.

A company can rebuild its enterprise architecture in response to changing market conditions.

Just as an architect erects a structure to a productive purpose by drawing up and executing a set of plans, a company builds an enterprise architecture. The way the architecture is built reveals how the compartments within the company are organized. Companies often describe this architecture in a flowchart. This illustration is also a reflection of how authority works within the organization.

Sometimes an architect may choose to construct a building using a load-bearing technique distributed along horizontal beams. Similarly, a company may choose to create 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 oversee and direct the work of employees in a hierarchy. A network 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 enterprise architecture in response to changing market conditions. In this case, the company will first do a review looking at how workers are grouped, what roles are performed, and how authority structures work in the company. The supply chain and distribution networks are also part of the organizational architecture.

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Enterprise architecture may have been built piecemeal over time. This can result in areas where organizational structures are undermining company goals. Changing authority structures within a company is not a task to be taken lightly. Interruptions for team members and managers can be psychologically overwhelming when long-standing routines and well-defined relationships undergo significant changes.

Often, a company changes its architecture gradually. This disadvantage is the same as it would be in a building renovation. There will be building wreckage, metaphorically, in terms of confusion over roles and authority structures. This confusion will confuse the workplace and will likely affect the company’s operational efficiency during the transition.

Sometimes a major organizational architecture overhaul may be necessary. Technological changes can be the trigger for such a change. Gradual changes in enterprise architecture can result in a greater degree of responsiveness to the macro environment.

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