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Ефективна економіка № 12, 2017

УДК 65.014.1


I. Horbas`

PhD in Economics, Lecturer, Management of Innovation and Investment Activity Department,

Taras Shevchenko National University of Kyiv

M. Linnik

Student, Management of Innovation and Investment Activity Department,

Taras Shevchenko National University of Kyiv




І. М. Горбась

к. е. н., асистент кафедри менеджменту інноваційної та інвестиційної діяльності,

Київський національний університет імені Тараса Шевченка

М. С. Ліннік

студентка економічного факультету,

Київський національний університет імені Тараса Шевченка




The article dials with theoretical, methodological and practical recommendations for the improvement of organizational structures of domestic energy-sector enterprises. The generalized algorithm for improving the organizational structure of domestic enterprises were developed. The organizational structure of SE ‘NAEGC ‘Energoatom’ was analyzed and its main advantages and disadvantages were determined. The indicators of the effectiveness of the organizational structure of ‘Energoatom’ were calculated and substantiated. Main recommendations for improvement of the organizational structure of SE ‘NAEGC ‘Energoatom’ with the analogy method according to the example of Southern Nuclear Company, Inc. and with the method of organizational modelling are presented.


У статті представлено теоретичні, методичні й практичні рекомендації щодо вдосконалення організаційних структур вітчизняних підприємств енергетичного сектору. Запропоновано узагальнений алгоритм удосконалення організаційних структур підприємств. Проаналізовано організаційну структуру ДП «НАЕК «Енергоатом» та ідентифіковано її основні переваги й недоліки. Подано рекомендації щодо удосконалення організаційної структури підприємства методом аналогій (на прикладі Southern Nuclear Company, Inc.) та методом організаційного моделювання. Розраховано показники ефективності вихідної та перепроектованих організаційних структур.


Keywords: management, organizational design, organizational structure, analogy method, method of organizational modeling.


Ключові слова: менеджмент, організаційний дизайн та проектування, організаційна структура, метод аналогій, метод організаційного моделювання.




Organizational activity is a basic function and an indispensable stage of management process. Thus, design and development of the organizational structure in order to improve its quantitative and qualitative characteristics and to adopt to the new conditions of functioning are required conditions for effective management and full implementation of managerial activity.

Building an effective and rational organizational structure of enterprise requires using of appropriate methods of organizational design, which ensure its flexibility, adaptability, validity and compliance with strategic objectives of a company.



The methodological and theoretical basis of the research is scientific works on organizational design and its management problems. The validity of the obtained results is confirmed by the use of various generally accepted and specific methods, as follows: theoretical generalization and abstraction, systematic approach (to represent organizational structure as a system of interrelated elements), dialectical analysis (to study quantitative and qualitative characteristics of organizational structures), comparison and systematization (to collate organizational structures of large energy-sector companies), induction (to develop the stages of organizational structure redesign taking into account its shortcomings), analogy method and modelling method (to redesign the organizational structure of SE ‘NAEGC ‘Energoatom’).



The problem of organizational structure improving have been reflected in numerous scientific and professional papers. Milner [6], Nizhnik and Nikolaychuk [8] for organizational design suggest joint using of the following methods: analogy, goal structuring, organizational modeling, expert-analytical, Introspect and mathematical modeling.

Yankovskaya [10] considers the most effective method of organizational design to be expert-analytical when combined with others. Shegda [9], in addition to the above, proposes method of distribution according to functions, products, consumer groups, production stages, working shifts, geographical location and a combined method. Evenko [2] states that nowadays, it is necessary to update the "classical" methods of organizational design, taking into account the existing obstacles and constraints that characterize the modern globalized market.

Monitoring and diagnostics of enterprise organizational structure are required components of organizational design. This allows to review management system of the company and its labor division to ensure the implementation of effective organizational changes. The authors propose the following sequence of steps to improve the organizational structure (OS) of enterprise: (1) analysis and diagnostics of the OS; (2) determining the objectives of OS redesign; (3) development of criteria for OS redesign; (4) designation of quantitative and qualitative limitations and external and internal obstacles to organizational changes; (5) determining the type of future OS; (6) choosing the method of OS redesign; (7) development of alternative OS and their analysis based on the criteria and constraints defined in the previous stages; (8) choosing the optimal OS; (9) development of organizational changes plan and project documentation; (10) carrying out organizational changes; (11) assessing the effectiveness of new OS according to selected criteria; (12) making final adjustments to new OS; (13) the economic effect calculation of OS reorganization; (14) formulation of conclusions.


Figure 1. Simplified organizational structure of SE ‘NAEGC ‘Energoatom (top-management level)

Source: completed by authors


The diagnostics of company organizational structure involves identifying its strengths and weaknesses and evaluating the indicators of its effectiveness. The results of organizational analysis of Energoatom (Fig. 1) are presented in Table. 1.

In the presented structure there is an inefficient work distribution between top-managers and low efficiency of interaction between president and deputies. In President`s direct subordination there are 24 people and/or divisions (6 executive top-managers, 5 production units and 13 functional structural units), which is 5 times higher than the norm of controllability [5, p. 95]. The number of his official work links by Greykunas-formula [3, p. 94] is more than 200 000, which critically exceeds the maximum permissible norm of 1000 official communications. The President is overloaded with operational management, it leads to a strong centralization of decision making and insufficient attention to strategic management.


Table 1

Indicators of the effectiveness of the organizational structure of SE ‘NAEGC ‘Energoatom

Indicator name

Before redesign

After redesign (analogy method)

After redesign (modeling method)

Number of official

work links

(norm <= 1000)





I Vice-president




Vice-president №1




Vice-president №2




Span of management (norm: 5-12)





I Vice-president




Vice-president №1




Vice-president №2




Controllability level

(norm: 1)





І віце-президента




Vice-president №1




Vice-president №2




Management and decision making centralization




Structural centralization rate




Source: calculated by authors


To improve the organizational structure of Energoatom, we use the analogy method. The basis for benchmarking is Southern Nuclear Operating Company, Inc. (Southern Nuclear) [12], the leader among american nuclear operators.

Proposed redesign of senior management structure involves changes in the placement of existing elements and in the nature of work links between them without creating or eliminating existing posts and/or divisions. The redesigned structure, as the original one, has 49 elements; the number of hierarchy levels has been reduced from 6 to 4 and this leads to a reduction in administrative costs for organizational structure maintenance due to more rational interactions between its components.

The President heads the organizational structure; 5 vice-presidents are directly subordinated to him (Fig. 1). The functional activity of each vice-president is determined by analogy with the vice-presidents of Southern Nuclear. Moreover, 3 functional divisions are directly subordinated to the President (the center for prevention and combating of corruption; the committee on competitive bidding; the top secret department) to prevent the pressure of other elements of the organization on these units, taking into account the specificity of their activities.

The number of official work links of the President was reduced to 2376; his span of management was narrowed to 9 subordinate posts and/or divisions and his controllability ratio was normalized to 2.25. In addition, the Vice-Presidents`s span of management has been optimized (expanded). The centralization of management and the structural ratio of centralization have been reduced to 0.12 and to 0.18 respectively, which indicate management and decision-making decentralization in the company (Table 1.).

The main results of organizational redesign of Energoatom are: optimization of the president`s span of control; simplifying the control process by reducing the management hierarchy; improvement of organizational units placement on the principle of functional differentiation; decentralization of management and decision making due to horizontal expansion of the company structure.

Main disadvantages of this structure are: the uneven work distribution between vice-presidents and wide span of control of the President.


Figure 2. Simplified organizational structure of SE ‘NAEGC ‘Energoatom (top-management level),

redesigned with analogy method

Source: completed by authors


The application of the organizational modeling method (graphical-analytical model) based on the diagnosis of organizational structure disadvantages and on the main directions of their improvement.

After the redesign, the total number of organizational units of the enterprise grew from 49 to 55, and the number of hierarchy levels decreased to 5 (Fig. 3). At the same time, the growth of administrative expenses for organizational structure maintenance is compensated by the optimization of top-managers` span of control and by the increase in the efficiency of their work.

The President`s span of control has been optimized and the number of people and/or units directly subordinated to him has been reduced to 7 (Tab. 1). I Vice-President & Technical Director is provided with operational management of Vice-Presidents. The inefficiency of Vice-Presidents work has been eliminated by substantially rationalization of labor resources usage. Regularization of placement of organizational structure elements in accordance with their functional characteristics allowed to establish new official work links between units which specialize in performance of similar or related tasks. Moreover, the delegation of operational decision making to the functional managers will increase the flexibility and adaptability of the structure and lead to progressive changes in all organizational processes of the company.


Figure 3. Simplified organizational structure of SENAEGCEnergoatom’ (top-management level),

redesigned with modeling method

Source: completed by authors


The implementation of this organizational structure facilitates the control procedure in the company, establishes a system of work interrelations between structural divisions and/or posts and increases work productivity of personnel. In addition, the company's administrative expenses will be significantly reduced by the increase of work interactions effectiveness between organizational units and more rational use of labor resources.



Proposed improvements in the organizational structure of SE ‘NAEGC ‘Energoatom’ allow to reduce administrative expenses, to optimize the top-management span of control, to rationalize the usage of labor resources, to establish unity of command, to decentralize management and decisions making, to establish work links between functional units, to reduce management hierarchy and to increase the level of flexibility and adaptability of the company as a whole.

The algorithm for improving the enterprise organizational structure presented by authors can be reviewed and adapted by accumulating more information and taking into account a greater number of quantitative and qualitative characteristics of organizational structure. In addition, redesign of SENAEGCEnergoatom’ organizational structure with other methods is a main direction for further research.



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7. The official site of SE NAEGC Energoatom, “Structure of the enterprise”, available at: http://www.energoatom.kiev.ua/ru/about/structure/ (Accessed 4 February 2017)

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12. The official site of Southern Nuclear Operating Company INC, “The Organizational structure of the company”, available at: https://www.nrc.gov/docs/ML0529/ML052980515.pdf. (Accessed 10 March 2017)


Стаття надійшла до редакції 14.12.2017 р.