How complex is your organization internally?
USAA has three managerial levels in the organization consisting of the chief executive officer, executive vice presidential staff, and presidents of corporate divisions. The seven executive vice presidents and the three divisional presidents all report directly to the CEO. In addition, the division presidents rely on the executive vice presidents and their staff for resources (USAA, 2016).
There are seven distinct administrative support divisions and three corporate divisions in USAA (USAA, 2016). This breadth indicates that tasks are highly specialized in each area to provide enhanced services in those areas. This differentiation strategy is considered high differentiation. There are two to three levels in the organizational chart depending on how the organizational structure is interpreted. Regardless of the number of levels that individuals identify, two to three levels is considered low vertical integration.
USAA would be classified as flat in terms of organizational complexity. There are few managers between the top executives and workers on the front line of the organization. Lower level workers are granted the ability to make decisions based on focused policy, strategy, and guidance through oversight and monitoring. The technology interfaces utilized by workers guide them through decision making processes and automatically provide options for customers based on existing, and revised, customer data.
Locate your organization on the figure, what is the complexity?
USAA is located on the bottom right quadrant of the Organizational Complexity chart. Characterized as flat, USAA has high horizontal differentiation and low vertical differentiation with two to three levels of management and ten distinct areas of corporate responsibility. The executive vice presidents and corporate division presidents convey the desires of the CEO and board of directors to the front-line employees who have well-defined roles and responsibilities, aided by a focused set of rules and regulations, to guide in the decision-making process.
Does your organization’s complexity fit its structural configuration?
USAA’s structural configuration can be classified as functional. “All activities in the organization are grouped together by common function from the bottom to the top of the organization (Daft, 2008).” The CEO oversees specialized departments that focus on their core duties which allows them to build knowledge and skills within the organization.
Is there “fit” across the organization’s components? What do we know now about how our organization aligns across these categories? What would make them more effective? Should your organization change its structure based on its complexity?
USAA’s organizational components do not fit across the areas of configuration, environment, strategy types, organizational goals, and organizational complexity. Previous analysis of the company has classified the environment as varied with an analyzer with innovation strategy, and an organizational goal of efficiency and effectiveness. These categorizations did not align, but based on the operational goals of the company their current operational style fits their needs and provides them with the ability to adapt as needed. The organizational complexity was surprising, but it seems to fit the eclectic makeup of this successful company.
Daft, R. L. (2008). Organization Theory and Design. Mason: Cengage Learning.
USAA. (2016). Executive Council. Retrieved from USAA: https://www.usaa.com/inet/wc/about_usaa_corporate_governance_executive_council