It is quite alarmingly to observe the frequency with which organisations reach for the “structure button” whenever they need to wring some improvement from their organisations.

It is reasonably understandable why this occurs. This is because structure is arguably the most pervasive, visible and responsive element of the organisation. When required to “do something”, a CEO will often change the structure so that he/she is seen as having done something quickly - irrespective of whether the change brought about will create the impact desired.

Certainly structure can aid (or hinder) certain outcomes. In fact, the wrong structure can have disastrous ramifications on people, process and outcomes. However, structure is “no more” than an enabler and should be treated as such. It should never be the first point of call when seeking improvement, as structure is a necessary outcome of “higher level” decisions made for the organisation.

The relationship between these elements of the organisation are as follows:

1. The organisation exists to fulfil owner objectives. The fundamental characteristic here is the recognition that the initial stimulus of all organisations is the satisfaction of owner needs. This is equally true of public and private, large and small organisations.  Corporate objectives therefore must reflect owner objectives. 
2. The organisation chooses to operate within specific economic, social, cultural, regulatory and economic parameters within which it must be active in order to fulfil its owners' objectives and extract the benefits sought by them.
3. Within this market, the organisation must choose what it will offer (i.e. its products and services) so that a benefit can be extracted from the chosen market in order to satisfy owner objectives.
4. Once an organisation's products and services have been identified, it must choose the methods by which the market will become aware of its offerings and how these offerings will reach their market. This is the classical four “Ps” of marketing. The market and product/service decisions will open up a number of distribution, support and delivery options.  How does the organisation get the products and services into the market while still satisfying core objectives? What channels of distribution, service delivery systems and marketing communication strategies are available and which ones deliver the desired benefit? Answers to these questions are impossible without knowing what outcome is desired.
5. Once the market and product mix strategies have been determined, it is then necessary to assess their impact on the organisation's product and service delivery capability, particularly human resources, structure, information technology and financial resources. The higher-level decisions will significantly determine decisions on human resources, structure, information technology and processes required to make it happen. A decision to manufacture versus a decision to retail, for example, will cause significant changes to H.R., I.T., organisational structure and process strategies. The higher-level decisions determine the mechanistic needs of the organisation.
6. Only when these tasks have been effectively completed, can an organisation pull together these divergent (and often conflicting) elements and call it a business, operating, corporate or strategic plan. After the higher level decisions have been made, an organisation can develop a holistic financial picture.  Only then can an organisation determine whether it will satisfy owner objectives.