Private and public sector organisations in the Middle East may simplify their hierarchical systems to stave off the effects of lower oil revenues and reduced demand, said an industry expert.

Those who have a clear understanding of the levels of organisational hierarchy needed can identify the most effective spans of management control and consequently will have a better future in the region, said PA Consulting Group, a major global consultancy.

The right approach has already saved progressive organisations like Dubai-based dnata tens of millions of dollars, while others continue to be held back by historical problems, said Phillip Rice, organisational expert at PA Consulting Group, Mena.

"As the impacts of lower oil revenues and reduced demand effect the region, private and public sector organisations must look at the efficiency of their organisation structures," he explained.

"This will be a key differentiator in both the private and public sector. Initiatives to improve efficiency, through better allocation of resources, must be based on a fundamental understanding of the hierarchy that is required in the organisation and how management can work most effectively to best deliver business outcomes.

"Organisations that have taken this approach are not only realising reduced costs, but also greater clarity of performance measurement and improved employee satisfaction. By applying these principles, we helped dnata, one of the world’s largest air services providers, save $20 million per annum," he added. Rice identifies two historical factors why this approach has not been widely applied in the region. The first is that human resource practices have often been adopted from military or civil service organisations.

"This means approaches to organisation, grading and promotion are grounded in a ‘rank and file’ approach suitable for an annual intake of recruits and promotions based on time in service," he said.