To: Santiago Guarderas, Mayor of Quito

From: Cristina Reyes consulting groups

Date: November 9th, 2022
Topic: Advice for the organizational structure of a new government division; decentralized
boroughs

Executive Summary:

Designing a successful organizational structure is challenging for every organization, despite its
public or private provenances. Various scenarios must be analyzed to avoid miscalculations on
structural designs; Wildfire company can be taken as a clear example of momentary success.
This entertainment company started as a friendly/organic company and, due to technological
development, reached success in 2012 by doubling its revenue. Nevertheless, its lack of vision
in restructuring its system of task, power, and reporting relationships led them to become a
blunder enterprise in just a few years. Considering this experience, several recommendations
for developing a new government division can be stated, being the three principal ones to
approach a correct organizational structure, formalize order by designing a bureaucratic system,
and differentiate leadership from management.

Background:

Wildfire company faced these issues because, from the start, they didn't count with a clear
administrative order nor growing projection. This enterprise worked with a two-layer employee
division, and while their responsibilities kept increasing, the company's organizational structure
did not. Once a professional was hired to redesign the entire organization, better performance
was achieved, but organizational gaps still needed to be addressed despite the redesign. The
main reason for this to happen was no longer the departmental chaos but rather the need for
more objectives and leadership from the main board. This private enterprise example provides
essential information to consider while creating a new government service, from starting with a
well-defined structure to establish clear goals and objectives.

Recommendations:

1. Analyze specifically and approach a correct organizational structure

Wildfire made the wrong decision when choosing a functional and then a matrix
structure. Because of their several products and services, the unique approach they
should have taken is a divisional structure oriented to the market. For a public company,
a specific evaluation of its inputs, outputs, and objectives must be done on a very
technical level. This information will help you to determine the most effective
organizational method to succeed. Based on the pros and cons of the instability of the
public sector, we recommend implementing a divisional approach based on service. The
divisional structure will improve coordination and promote flexibility for responding to
external changes. Additionally, employees’ expertise will be focused on service, and the
structures will grow or downsize based on service needs.

2. Formalize order by designing a bureaucratic structure

The main problem with Wildfire was their lack of vision while the company's demands
kept growing. Two clear signs for organizational adjustments arose: technological
innovation and exponential revenue; still, the enterprise didn't adopt measures to
maintain operations sustainably. Identifying these events is crucial for
 changing/enhancing organizational techniques. A simple way for such a fast and diverse
growing company is to approach a bureaucratic structure that allows a correct
distribution of tasks, installs hierarchies, and determines employees and group behaviors
as expected. As the public sector is continuously changing and acquiring more
responsibilities, the new office should adopt this method for working; this will foster
sustainability and systematic growth.

3. Differentiate leadership from management and choose the correct approach

Leadership and management are complementary, but they are not the same1. Because
their correct performance connects with accomplishing goals, both are required for
successful organizational development. Leadership mainly refers to the action of
influencing individuals, while management indicates a process of planning, control of
resources, and decision-making to reach goals. This particular case exposes the
importance of differentiating these terms to make an institution more efficient. While
Wildfire had strong and several leaders (including Ranking, the hired expert), it did not
count with strategic enterprise management. Of this experience, we recommend
establishing a high-level profile for the CEO of this new organization; this person should
demonstrate managerial skills and specific expertise in the public sector.

Next Steps:

The priority is to determine which would be the organizational structure for this public enterprise
(based on accurate data). Information on the exact tasks this agency will follow, common
challenges, employee behavior, and others should be collected. Again, based on public sector
experience, we recommend a divisional approach based on service. Second, and very
important as well, an organic structure must be avoided; for this, the bureaucratic system mas
be immediately designed and implemented as soon as this office opens to the public.
Concurrently, the organization's CEO profile must be discussed and formalized.

1
Griffin, Ricky W.; Phillips, Jean M.; Gully, Stanley M.. Organizational Behavior: Managing People and Organizations (p. 407). Cengage Learning.
Kindle Edition.