( Assess the impact of outsourcing and centralization on CRE organizational design
( Understand the span of control associated with current organizational structures
( Evaluate the impact of environmental factors and other drivers of organizational structure
( Determine the extent to which organizational structure is aligned with business objectives
( Determine the issues and strengths associated with current organizational structures.

The notion of lean and mean may be overstated. Rather, CRE departments tend to be scaled to the size of the total organization and the degree of outsourcing. There are many different approaches to organization structure depending on what functions are outsourced versus performed in-house.
 Larger organization size is associated with:

( Vertical complexity - i.e. multiple management skills
( Horizontal complexity - i.e. more jobs and departments
( Increased specialization of skills and functions
( Greater formalization
( Greater decentralization
( Smaller percentage of top administrators
( Greater percentage of technical and professional support staff
( Greater percentage of clerical and maintenance support staff
( Greater amount of written communications and documentation

MANAGEMENT REPRESENTS LARGE COMPONENT OF A SMALL STAFF

Survey results indicate that outsourced organizations still need senior managers inside. Increased centralization is more a factor of cost reduction than a motivating philosophy and conflict often arises between this centralization and the need for flexibility and speed.

It's clear that very large companies operate with very small internal staffs. Larger staffs are associated with very large geographic coverage for the most part, according to the survey. Typically, highly outsourced organizations still require a high percentage of senior managers inside. Among the survey participants, companies outsourced 50% of their spending and averaged about 120 CRE employees, with about 20% of those in management roles.

Companies indicated contradictory priorities for both efficiency and control, and flexibility and innovation. Flexibility can come through leasing, the workplace, location strategies - which can be seen as a hedge against the risk of volatility in industry change - market swings or even world events. However, the study points to centralization as a counteracting influence or inhibitor of flexibility. The findings hint that flexible practices are more at the level of what's effective or more strategic, and that centralization is characteristically more efficient by nature.

In some cases, increased centralization is a step in an effort to reduce cost and increase consistency rather than an ultimate goal. Ultimately, structure and organization must accommodate flexibility and innovation if a multinational corporation expects to grow. It appears most organizations are still working to achieve this balance, so that organizations today are not optimally structured for high volatility.

EVOLVING ORGANIZATIONAL STRUCTURE

One way global companies are addressing the flexibility issue is by using hybrid models that centralize strategic functions like planning and CRM while decentralizing functions like operations, maintenance and facility management. From a transaction standpoint, some companies tend to centralize routine acquisitions and dispositions outside of the M&A context, yet others show a willingness to decentralize or localize transactions even to the more strategic M&A decision-making level largely through the due diligence process.