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The Rise of Team-Based Organizational Structure | Secrets to High Performace in 2024

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Astrid Tran 17 November, 2023 10 min read

We’ve heard a lot about “Inside Out” and “Outside In” terms when it comes to business strategy. Which approach is more suitable for organizations that are facing a fast-moving global market and technology disruption?

Deconstructed from the Inside Out approach, a Team-Based Organizational Structure with an emphasis on inner strength might outperform traditional organization silos to help the company sustainably thrive while facing ongoing changes. Yet, there are still many misunderstandings about his type of organizational structure, which still needs to be examined. If you want to learn more insight about team-based organizational structure and find out the reasons why teams fail, let’s dive into this article.

Table of Contents:

Definition of Team-Based Organizational Structure

From the past time to the present, in a traditional corporate structure, employees always stay at the bottom of the organizational hierarchy, with little or no right to make decisions.

Yet, the emergence of the team-based approach delivered a vertical approach to management because it encouraged the employees to participate in decision-making by expressing their ideas and visions, which significantly affect today’s business success. All the team members, without an internal hierarchy of their own, work together to achieve common goals.

Team-based organizational structure diagram
Team-based organizational structure diagram | Source: Luxchart

What are the Features of Team-based Organizational Structure?

The fundamentals of team-based organizational structure differ from organization to organization. However, first and foremost, there is never a lack of collaboration. Teams are formed from many individuals who complement other members’ knowledge and abilities.

“Structure … helps create culture, and when the culture is such that people love being together in the workplace, incredible things happen.”, said CEO Louis Carter of Best Practice Institute. Not a thing is about individuals, and success is harnessed through the collaboration of teams.

Moreover, in a team-based organizational structure, team members have enough freedom and authority to complete their responsibilities. This means employees are empowered to make decisions, innovate, and quickly form teams to prototype and experiment.

Because employees are closer to customers and the market, their decisions should be made quickly to enhance customer’s experience rather than wait for approvals from managers. This illustrates the autonomy in the workplace, where executives and leaders establish organizational goals and performance standards. However, how to achieve these goals and plans is decided by the employees themselves.

In today’s workplaces, which lean heavily on dispersed and remote workforces and virtual communications, team-based companies are simply obvious. They keep the flow of communication open in all directions, avoid repetitive work, and benefit fully from team members’ capabilities. It is the reason why networks of teams are the future. 

💡 Exploring 9 Distinct Types of Team: Roles, Functions, and Purposes

team-based organizational structure advantages and disadvantages
Team-based organizational structure advantages and disadvantages

Advantages of Team-Based Organizational Structure

So why do organizations put so much effort into designing team-based structures? There should be reasons for it. The following advantages are the best answer.

Promotes innovative ideas

In a team-based organizational structure, employees are fully supported to initiate ideas and do research. When every employee shares in the focus on excellence, the ability to respond to the continuously evolving global marketplace is improved. Sharing ideas becomes essential in this situation.

For example, team members can suggest a redesign for the product packages to attract more customers, ideas to solve customer complaints, and improve consumer experience and retention.

💡How to Be Creative in Workplace | 6 Ways to Find It

Improves communication

Openness is the key to success in teamwork. It is well-used in this organizational structure, where team members can share ideas to address an issue directly to the senior management, which encourages smooth information flow and makes it easier for employees to contribute to greatness and innovation (Smithson, 2022).

Enrich a sense of belongings

This type of organization builds rapport among team members. Team members look out for each other. They are not just colleagues at the workplace, not just competing with each other to earn recognition. There is always a team member who is willing to help another when she or he has difficulty. Team-based companies inculcate a friendlier culture. Together, everyone works for the same goals and improves themselves as well.

Increases efficiency

When there is an elimination of bureaucracy and layers of management, team members’ responsiveness and action are faster than in other organizational structures. Without having to relay information up and down chains of command, employees can detect and respond to problems in real time. This leads to efficiency.

Disadvantages of Team-Based Organizational Structure

When applying a team-based structure, challenges are unavoidable. Let’s see what its disadvantages are!

Increase the possibility of conflicts

There is a high chance of team conflict. Diversity of opinion makes for better solutions but is also annoying. The more people, the more likely it is that tempers will flare at some point. You might hear about workplace gossip. Yes, it is common to see people who are not as capable or skilled, and word gets out that they are paid more than the experienced people. Drama!

💡There is no better way to connect everyone than having team-building activities. You might also like Team Building Activities For Work | 10+ most popular types

Hides underperforming team members

In many cases, it is somehow hard for team leaders to distinguish productive team members from others who seldom contribute to achieving the goal, as the completion tasks are submitted as a team. Another reason for this is a person who feels he doesn’t fit a certain company culture or team because it doesn’t match up well with his work style and values.

💡How to Deal With Underperforming Employees? Get ready for your team to take 360 degree feedback with AhaSlides!

Incompatible work environment

Not to mention team members have different levels of experience or expertise. People don’t feel like they’re on the same level. There are always some team members who may resist working in a team because working independently helps them produce high-quality results. This creates “a not being a team player” phenomenon, where there is a personality clash, leading to friction between employees.

💡Every team member should be cared and treated for equally. Written for you: Mastering Talent Acquisition Management | A Comprehensive Guide

Productivity paranoia

Virtual teams are a whole other level of intricacy. Almost all remote team members require more trust and empowerment from their employers to do their work beautifully. However, many managers have a strong concern for productivity paranoia: it is said that 85% of leaders find employees aren’t working hard enough if they can’t observe them in person.

💡Find an ultimate way to manage a team working remotely. Check out: Managing Remote Teams | 8 Expert Tips With Examples in 2023

Tips for Effective Teamwork from AhaSlides

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What are the Best Examples of a Team-based Organizational Structure?

Many companies have been successful in managing a network of teams to achieve long-term goals. And how these companies make an effort to maintain success in a team-based organizational structure.

Google – Team Based Organizational Structure Example

For Google, a team-based structure is the key to thriving. Google has a cross-functional organizational structure that highlights team management. In order to form personnel in a way that will help the organization’s growth, the functions above are employed based on the employees. Besides utilizing a distributed leadership approach, the company also makes an effort to team engagement and broaden team dynamics. More importantly, everyone has the same right and chance to show their ideas and contribute to the company’s success.

Virtual teams in Google Team based organizational structure example

Deloitte – Team Based Organizational Structure Example

Cross-functional teams have been used in Deloitte’s management strategy for many years. According to Deloitte’s Predictions for 2017, “smaller, empowered teams are more effective in developing solutions tailored to customers, markets, and geographies.”.

Its recent report also states the matter of “establishing dynamic networks of empowered teams that communicate and coordinate activities in unique, powerful—and digital—ways.” The company believes that teams are the most influential way to improve the ability of the organization to sense changes in the environment and respond quickly to them.

Key Takeaways

Collaboration is essential to any successful team, contributing to the organization’s overall success. Under a team-based organizational structure, leaders should promote healthy competition among team members and prevent team conflict. There are many ways to foster teamwork effectively, even if it is a virtual team.

🌟 AhaSlides encourages team connection in virtual ways, with interactive and collaborative features to help leaders create engaging training, team building, and surveys.

Feedback can boost effective communication in the workplace. Gather your coworkers’ opinions and thoughts with ‘Anonymous Feedback’ tips from AhaSlides.

Frequently Asked Questions

You have questions? We got you the best answers!

What are the 5 features of a team?

Here are five characteristics of high performance team:

  • Clear leadership
  • Defined Roles and Responsibilities
  • Trust and respect
  • Open communication
  • Professional growth

What is an organizational silo?

Organizational silos illustrate business divisions that operate independently and avoid sharing information with other divisions in the same company. This means that professionals only communicate and cooperate with coworkers in the same silo as them. 

What is the difference between team and silo?

Silos is a special team that works intentionally and insulates itself from other teams or the entire organization. In most cases, organizations aim to break down silos and promote cross-functional teams.

What organizational structure do most companies use?

A functional—or role-based—structure is one of the most popular organizational structures. In a functional structure, there are different departments responsible for specific functions or tasks, such as marketing, finance, operations, and human resources.

Ref: Risepeople | Indeed | USC