How to create a clear organizational structure

Business organization structureBusiness organization structure is one of the important elements of the management process. It is the foundation on which the whole structure of management is built. Organizational structure and function form the skeleton which gives shape and defines clarity, supports the organization, and gives it shape. Just like each bone in a skeleton has its own function, each branch and level of the organizational chart has varying functions. The different jobs and departments that make up the structure of the organization are part of the plan to ensure the organization performs its tasks and and meets its goals properly.

Create a stable structure

Identify the tasks that have to be accomplished and put these functions into departments according to the nature of the work. For example, advertising, selling your products, and participating in industry trade shows are the tasks that you can group under the umbrella of the marketing department. Collecting and receiving money from clients, paying bills and vendors, and accounting for the revenues and expenditures are the tasks pertaining to finance and are usually organized into a finance or accounting department. With the help of a proper organizational structure, you can improve productivity, operating costs and ensure employee satisfaction.

Every organization in their respective field has a different structure that can be followed. They include simple, functional and multi-divisional structures. It includes the level of authority and responsibility of each person in the organization. In short, organization clarifies relationships and provides a framework within which all managerial actions take place.

Organizations involve following aspects
  • Identifying activities required to achieve the organization’s objectives
  • Grouping up activities into departments
  • Assigning responsibilities and duties to subordinates to achieve the tasks assigned
  • Delegating authority necessary for accomplishment of assigned tasks
  • Providing a proper system of co-ordination for the activities of departments and individuals

Employees are given work according to their experience and qualifications. This ensures that every individual is placed on the job which is best suited to him/her. It establishes a clear relationship between operating departments and brings balance in their activities. Different departments are created for specialization, division of work, and orderly working of the organisation. Effective administration will not be possible without the support of a sound organization structure.

Entrepreneurial Learning

Every organization requires an apt business organization structure. It has to be clear and every department and employee should be aware of his/her responsibilities. These structures can be of three different types – simple, functional and multidivisional. Chalk out the objectives of the organization, functions of every department, and responsibilities of each employee. This is sufficient for a new organization but as it grows bigger you have to keep improving your business organization structure.

Image courtesy: FreeDigitalPhotos.net

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