What’s the real impact of poor organisational structure?

One of the critical factors that can help or hinder the success of an organisation is its structure. For many, organisational structure happens organically over time with little reflection on its continued value to the business.

While it may seem like a relatively small thing, the impact of a poorly designed or implemented organisational structure can be enormous. In this blog post, we will explore the real impact of poor organisational structure and why it’s essential to address any issues as soon as possible.


Reduced efficiency and productivity

One of the most significant impacts of a poor organisational structure is reduced efficiency and productivity. When team members are unsure of their roles and responsibilities or work in silos, they are less likely to collaborate effectively. This lack of collaboration can result in duplication of effort, missed deadlines, and even conflicts between team members. Additionally, without a clear reporting structure, decisions may be delayed, and projects may stall.

Low employee morale and engagement

When employees don’t understand how their roles fit into the bigger picture, they may feel disconnected from the organisation’s goals and purpose. This disconnection can lead to frustration, dissatisfaction, and, ultimately, disengagement. Disengaged employees are less likely to go the extra mile, which can impact the quality of their work and the overall success of the organisation.

Increased turnover and recruitment costs

When employees are unhappy, they are more likely to leave the organisation. High turnover rates can be costly, both in terms of recruitment costs (just ask your hr team – they will give you hard figures) and lost productivity. Additionally, the cost of hiring and training new employees can be significant, and it can take time for new employees to become fully productive. A poorly designed organisational structure can contribute to high turnover rates, impacting the bottom line.

Missed opportunities for growth and innovation

Finally, it can limit the organisation’s ability to grow and innovate. Decision-making can be crippled, projects can stall and improvements are increasingly hard to come by, all negatively impacting growth and expansion opportunities.


In conclusion, the impact of poor organisational structure cannot be overstated. From reduced efficiency and productivity to low employee morale and engagement, high turnover rates, and missed opportunities for growth and innovation, the consequences of a poorly designed or implemented organisational structure can be significant. If you suspect that your organisation’s structure may be contributing to any of these issues, it’s essential to take action to address them as soon as possible. At Innovation Central, we specialise in organisational development and design and can help you design and implement a structure that supports your goals and objectives. Contact us today to learn more.