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Module 3.0
Example of Organizational Design for F&A Cabinet
The Finance and Administration Cabinet went
through the organizational design process
• Established design criteria
• Identified the desired Organizational Infrastructure
Characteristics
• Identified the weaknesses of the current characteristics
• Conducted benchmarking and best practices research
• Conducted design workshops
• Developed a conceptual design
• Developed proposed characteristics
• Created a briefing document
• Implemented (Career Paths, Rewards, Policies, etc.)
The Old Structure
Finance and Administration Cabinet
Office of the Secretary
Division of Internal Audit
Office of the Controller
Division of Social Security
Department for Administration
Division of Accounts
General Accounting Branch
Financial Management Reporting
Section
Dept Acct Section
Cash Mnt &
Reconciliation Section
Data Processing Branch
Data Entry
Data Control Operations Section
Division of Purchases
County Fees Branch
Pre-Audit Branch
Special Audit Section
General Audit Sect
Control Section
Fixed Asset Branch
Procurement Branch
Purchasing Section #1
Purchasing Section #3
Purchasing Section #4
Contract Admin Section
Customer Service Resource Center
Branch
Support Services Branch
Financial Reporting Branch
Support Section
KAPS Section
The New Structure
Finance and Administration Cabinet
Office of the Secretary
Customer Resource Center
Executive Director
Agency Administrative Support Branch
Division of Administrative Policy and Audit
Administrative Policy Branch
Department for Administration
Audit Branch
Office of the Controller
Division of Material and Procurement Services
Division of Statewide Accounting Services
Director
Division of Social Security
Prcurement Support Section
Accounting Services Branch
General Procurement Branch
General Accounting Branch
Financial and Management Reporting Branch
County Fees Branch
As noted, the Finance and Administration Cabinet is
moving towards an integrated services structure
Office of the
Secretary
Customer
Resource
Center
Administrative
Policy and Audit
As a result, the Cabinet identified the following
compelling reasons to change...
• Current structure did not promote customer
service
• Redundancies in activity (especially with
agencies)
• Current procedures and policies did not map with
new system functionality
Key tools that assisted in this process included...
• Criteria mapping against
model organizations
(Organizational Fit)
• Analyzing Span of
Control
• Independent design
workshops
• Organizations
characteristics assessment
• Design criteria and
performance objectives
• Change readiness
assessment
• Organizational Briefing
Document
• Career Path Templates
• Common Organizational
Models
These tools may help improve your agency’s administrative
services structure and operations
The Finance and Administration Cabinet developed
design criteria to shape their design activities
EASE OF TRANSITION TO NEW
ORGANIZATION
ENHANCES RESPONSIVENESS
TO AGENCY NEEDS
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Reduction in cycle times for services
delivered
Enhanced customer accessibility
Ease of establishing partnership
arrangements with customers
PROVIDES STREAMLINED STRUCTURE
AND PROCESSES
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Minimizes Costs to Manage (e.g...
layers, spans of control,
administrative overhead)
Fewer process steps and hand-offs
Minimizes duplication
Clear delegation of authority and
accountability to front-line staff
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Ease of transition
Duration
Cost
Complexity
Degree of Change
PROVIDES FLEXIBILITY TO
ACCOMMODATE ENVIRONMENTAL CHANGES
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Ability to adapt to new technologies
Ability to respond to new
departmental priorities
Ability to evolve to alternative service
delivery modes as appropriate
Finance and Administration’s Design Criteria
(cont’d)
IMPROVES SERVICE DELIVERY
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Effectiveness and Efficiency
Promotes quality of service
Potential for Revenue Generation/Cost
Recovery
ENHANCES WORK ENVIRONMENT
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Promotes teamwork and collaboration
Promotes innovativeness
Provides broader career options and
opportunities
They then designed high-level performance
objectives for the F&A Cabinet:
•Supportive to agencies
•Work Quality Improvements
•Cost Reduction
•Other Agencies’ Satisfaction
•Vendor and Customer Satisfaction
•Employee Satisfaction
•Speed/Responsiveness
•Service Levels Increased
The Cabinet then assessed the description of common Organizational Design
Models
Description
Model
Functional
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Service
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Strengths
Activities and employees grouped according to their
business function
Rely on functional expertise to support core
competencies
Most logical and simple form, focusing on a narrow
range of skills/expertise
Applicable when technology is routine, small
number of products, and/or if interdependence
across functional units is minimally required
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•
Each unit is responsible for the design,
development, and administration of a service
All resources are directly available to the unit
Each service unit is responsible for planning, within
the context of Commonwealth business strategies
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Geographic regions report directly to the cabinet
secretary
Each region has full control of all activities within
its geographic boundaries
Cabinet retains responsibility for strategic planning
•
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Geographic
Ideal when specialized resources are required
Can be efficient given economies of scale and
cost controls
Collaboration and quality within each function
Supervision easier
Easier to mobilize specialized skills when
needed
Weaknesses
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Adaptable to fast-changing external environment
Service contribution/revenue/profit are easily
calculated
Accountability is clear
Coordination across functions easier, given all
resources within a unit are supporting the same
service
Speed and often quality of decision making is
enhanced
•
Responsive to geographic demands
Economies of scale possible if regional facilities
may be shared across cabinets
Emphasizes geography as a control center,
which demands service development and
marketing focused on a geographic area
Quality of local management with respect to
customers and demands
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Difficult to manage when numerous services are
offered
Quick action/decisions may be difficult
More difficult to manage performance/accountability
relative to contribution
Loyalty to functional silos may cause lack of
coordination/cooperation
Cost reduction and organizational efficiency may be a
challenge
Can lead to high cost structure due to poor economies
of scale
Duplication
Reduced specialization of skill
Difficulty in coordination of multiple services within a
single geographic area
Potential conflicts between service unit and business
unit interests
Often slower rate of growth than other organizational
structures
Duplication and high overhead cost
Potential conflicts among regions and with central
office
Product variations and new technologies are not easily
transferred
Commonwealth-wide business strategy more difficult
to implement
Functional areas are difficult to coordinate and achieve
synergies
Description of Organizational Design Models (cont’d)
Description
Model
Matrix
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Customer
Focused
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ProcessCentered
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Strengths
Multiple reporting relationships represented by
grids and webs
Formal systems of multiple decision making,
communications, and balance of power
Common in engineering and project intensive
organizations
Multiple contacts are intended to facilitate
collaboration and coordination
MARS project had a significant Matrix orientation
•
Business organized around client groups such as by
Cabinet, agency, types of vendors
Teams with shared expertise in client area and
functional areas are assigned to client group(s)
Decisions are driven by client demands
Support levels refined based upon client needs -both unique and recurring
•
Business organized horizontally around linked, endto-end processes
Foundation is multifunctional teams, often self
directed and self managed
Teams, not functions or individual jobs, define the
structure
Rewards focused on team performance
Decisions are made at point of contact by
empowered employees
Decentralized, with few supervisors
Functional expertise maintained through centers of
excellence
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Weaknesses
May provide simultaneous attention to
geography, function, and product/service
Forces consideration of all factors and may lead
to agreement on mid/long-range actions
Multiple expertise focusing on problems
Allocation of scarce resources more efficient
Wide range of communications
Career opportunities for technical specialists to
generalize easier than in traditional pyramid
structures
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Complex and often difficult to manage
Encourages power struggles and political units
high cost
Decision making slow and encourages meeting
intensive culture
Responds to client/customer needs (e.g..
agencies, constituents, vendors) immediately
Performance is easily measured based upon
client input
Excellent when client base is segmented and
defined
Good for regional/large geography coverage
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Potential for redundancies in team activities may make
efficiencies harder to achieve
Need to have a large enough client base
Not conducive to inflexible environments that cannot
change with demand
Requires understanding of client needs and operations
Business outcome, customer focused
Productivity, speed, and quality likely to be
improved
Layers of supervision removed resulting in cost
reduction
Fewer power bases and political problems
Cost management more effective
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Operating culture difficult to change
Roles and responsibilities must be completely
redefined, employees trained, and leaders coached
Ability to maintain technical excellence may be more
difficult
Most public sector personnel policies do not support
team or matrix organizational management.
The Cabinet then completed the Organization Models/
Attribute Fit
Design Criteria/
Organizational Attribute
Functional
Service
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Enhance responsiveness to agency needs (speed)
Clear delegation of authority
Flexible to new technologies
Ease of transition
Quality conscious
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Geographic
Revenue generation/cost recovery
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Vendor-customer focus
Clear definition of roles & responsibilities
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Process
Centered
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Transparent to customers
Promotes teamwork & collaboration
Matrix
Customer
Focused
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MATERIALS AND
PROCUREMENT SERVICES
CUSTOMER
MATERIAL AND PROCUREMENT SERVICES CAREER PATH PROGRESSION
Serve as
agency
Purchasing
Associate
Purchasing
Associate
Assistant
Director for
Purchases
Sealed Bid
Purchasing
Officer
Strategic
Procurement
Specialist
I & II
Procurement
Branch
Manager
Small
Purchases
Team
Leader
1 year
OTHER KEY
AREAS
Purchasing
Technician II
After 6
mos.
After 1
year
After 1
year
Purchasing
Technician I
Serve as agency
Purchasing
Assoc. or Sealed
Bid Purchasing
Officer
After 6
mos.
2 years
3 years
Division
Director
Assistant
Director for
Purchases
2 years
4 years
2 years
Customer
Resource
Center
Customer
Resource
Center
Accounting
Services
Division