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Organizational Structure Options
1. Jove Tapiador
MABS Regional Manager, Luzon
2009 RBAP-MABS National Roundtable Conference
May 12-13, 2009
Hyatt Hotel and Casino
Manila
2. INTRODUCTION
Organizational
effectiveness and efficiency is
founded on the institution’s
shared vision;
clear strategy; and,
a well-defined structure.
4. Organizational structure changes in response to
changes in the shared vision and strategy as well
as changes in the operating environment.
This is what it means to be flexible and
adaptable.
5. Oftentimes, managers McKinsey’s 7S
focus on the their Framework
behavior or their Shared Vision
staff’s behavior.
Strategy
At other times,
Structure
managers look at their
Systems
staff’s skill sets.
Skills
Sometimes, they
Staffing
assume that a vision
and clear strategy will Style
take them through.
6. But often what is McKinsey’s 7S
ignored is how an Framework
organization’s Shared Vision
structure and systems Strategy
affect implementing Structure
activities. Systems
Without subsequent Skills
modification, people Staffing
revert to their old
Style
habits, become
frustrated, or find
themselves facing
inflexible policies and
procedures.
7. CASE STUDIES
Cases show how three organizations adapt to
changes in the marketplace, increase in clients,
increase in geographic scope, and greater
regulation.
This also attempts to visualize next evolution of
microfinance organizational structure.
8. CRYSTAL BALL EXERCISE
Year Clients Account Officers/Sup
Year 1 150 2
Year 2 300 3
Year 3 900 7
Year 4 1,800 13
Year 5 3,600 26
Year 6 7,200 52
Year 7 12,000 105
Year 8 17,000 117
Year 9 21,000 144
Year 10 25,000 170
9. Others would shrug it off. “I don’t believe we’ll
reach that size.” (Lack of Vision.)
Others would say, “That’s great! That’s what I
want. Now how will I go about it?” (Lack of
Strategy.)
Then some would mutter, “I know that will
happen, we’ll just do the same things we’ve been
doing.” (Lack of flexibility.)
10. CASE 1: FROM START-UP TO NEAR
GROWTH
Clients Less than 5,000
No. of AOs Less than 38
Organiza:on • Integrated with branch opera:ons.
• MF account officers usually report directly
to the branch manager or loan officer.
• For larger opera:ons, MF supervisor
oversees day‐to‐day opera:ons over MF
opera:ons.
• Clear lines of repor:ng to the branch head.
• Microfinance personnel supported by
regular bank support units such as HR,
Treasury, etc.
12. CASE 2: FROM GROWTH TO
MATURITY
Clients 5,000 to 15,000
No. of AOs 32 ‐ 105
Organiza:on • Integrated with branch opera:ons.
• Usually have an MF supervisor overseeing MF
opera:ons and repor:ng directly to the branch
manager.
• MF opera:ons spread over a number of
branches requiring MF Head Office unit
supervision.
• Consolida:on of reports at head office.
• MF opera:ons s:ll supported by head office
units.
14. CASE 3: MATURITY TO …
Clients 15,000 to 25,000
No. of AOs 105 to 168
Organiza:on
• Begins to affect bank culture.
• Greater senior management aVen:on and resources.
• Majority of MF opera:ons s:ll integrated with branch
opera:ons, but MF lending offices being established.
• Usually have an MF area supervisor overseeing MF
opera:ons repor:ng directly to head office.
• MF account officers have supervisors who report to the
branch manager.
• MF opera:ons supported by dedicated head office
units.
16. CASE 4: NEXT GROWTH STAGE OR
DECLINE
Clients Greater than 25,000
No. of AOs Greater than 160
Organiza:on
• Splintered culture between regular bank and
microfinance opera:ons.
• Establishment of dedicated senior management team
for microfinance.
• Mix of MF opera:ons aVached to the bank branches
and MF opera:ons aVached to dedicated lending offices.
• Usually have an MF senior officer overseeing bank‐wide
MF opera:ons at head office.
• Branch managers or MF area supervisors have oversight
over MF opera:ons.
• MF opera:ons supported by dedicated head office
units.
17. CASE 4: NEXT GROWTH STAGE OR
DECLINE
Branch
Head Office Manager
Head Office Cash Accounting Loans
Support Depts
Microfinance Microfinance
Support Depts
18. Banks need to often re-align organizational
structure and systems to meet the challenges
of growth:
More clients leading to more capital requirements
More capital leading to more fund raising activities
More clients leading to more staff and support
people
More people leading to more management time,
attention, and resources
More management time, attention, and resources
leading to more management specialization and
control.
19. CONCLUSIONS
A clear vision and detailed strategies
are not enough.
At a certain scale, employee behavior
modification and management training
have limited impact.
Accept reality of complexity in large
organizations.
Therefore, attention to reporting
structures and improving bank-wide
management systems become critical.
20. McKinsey's Performance Leadership Survey:
An in-depth questionnaire designed to explore an
organization's effectiveness.
Set up in 2002, the database contains information
from almost 400 discrete business units of 231 global
businesses in all major regions and industry sectors.
More than 115,000 individual managers and
employees have participated.
21. Thestudy revealed the following key strategies to
organizational effectiveness:
Clear vision and strategy
Accountability
Openness and trust, basis of performance culture