The great business unit con

May 23 2007 by Print This Article

One of the most-prevalent trends in many organizations at the moment is the breaking up of the corporate structure into "business units." The Corporate Cynic has an interesting take on this, arguing that far from making things more efficient or productive, all this is doing is creating the perfect breeding conditions for more executives and their assorted hangers-on and cronies.

...enter the "Business Unit Leaders," the new mini-CEO's who are each managing a product, product line or group of customers. Each leader has his or her personal strategy and agenda. They are charged with leading their business units as if they were separate business enterprises.

The Cynic argues that prior to this latest corporate fad, the structure at most companies was easy to define - it was a simple pyramid. This new structure "can now best be described as being made up of three parts with a pyramid at the top. Lying beneath this structure there is a small sphere that is spinning out of control. Under that sphere is a huge elongated rectangle." That's a description that anyone who has spent some time recently in a large corporation will probably identify with at once.

To make matters worse: "the Business Unit Leaders report to the CEOs...Beneath that layer are the AVPs and directors whose allegiance may lie within a function, a business unit or whoever brought them to the company. Within the elongated rectangle at the bottom of the structure lie the salaried and hourly employees. Squeezed between the pyramid and the rectangle is the spinning sphere containing the remaining middle-management."

In other words, a host of individuals whose roles are unclear existing within an ill-defined management structure and operating competing agendas. In short, not an environment conducive to productivity.

Perhaps we should call in some consultants to explain it to us.


Older Comments

Thanks for the review of my latest post. Maybe someday, somehow, someone will wake up!


Jerome alexander