Introduction to organizational structure
Organizational Structure is a system that every company makes the effort to develop. It outlines the manner in which information about goals, objectives, responsibilities and delegation of activities is distributed amongst various levels of operations in the company. An Organizational Structure aids in creating an efficient system of achieving goals and communicating with peers and other employees.
Understanding Organizational Structure
Organizational structures are important to companies as they tend to outline what activities need to be performed and who will be performing them, in order to achieve the long and short term goals of the company. It is a map, an hierarchy of what responsibilities and authorities people at certains levels of the map hold, and how they can delegate them with that power to attain organizational goals.
This outline specifies how the information flows between all levels of operations and management. Organizational structures depict the manner in which decisions are made. This structure helps in optimal allocation of resources, thereby improving coordination between all lines of work. Due to this predefined flow, communication is also easier when the organizational structure is understood.
Highlights of Organizational Structure
While every company or institution requires an organizational structure, not all structures are the same across all companies and among industries. That is why there are 4 most common structures: functional, divisional, flatarchial and matrix structures.
Not having an organizational structure is detrimental. It enables miscommunication and duplicates work and responsibilities, and reduces performance and employee efficiency. As a result, decision making is delayed and because the shape of the organization is unspecified, there may be a wastage of resources.
Commonly, organizational structures are centralized in nature. However, decentralization of organizational structures have brought a rising benefit to not monopolize decision making.
By instead establishing authority via interdependence rather than leaving it to a central authority, new age companies are more agile and adaptable, and provide personal agency to employees.
