The effectiveness of organizational structure

advantages of an effective organizational structure

It is no surprise that these people are a small percentage of leaders in any organization. Ensuring that your organization has policies and processes in place to hold leaders accountable for their behaviors as well as results. It is more effective for smaller companies to complete task and projects without waiting on decisions from multiple managers.

When the accounts receivable system is streamlined and in working order, customers are credited with paying their bills and allowed to continue to buy from the company.

to be effective an organizational structure should quizlet

Understanding the ways that an organizational structure assists in effectiveness and efficiency can help determine the benefits corporate planning. In an ad agency, for instance, the owners of the company and HR could use a centralized system into which each department feeds.

For example, under the sales department, we may have a sales director for each country where the company has a significant presence.

Real life example of functional organizational structure

Information Flow in Organizational Structures In an organizational structure, information flow could be top-down, where the boss makes all major choices and distributes responsibilities to her team. A company can start out by using one of several organizational structures. In more traditional offices, the centralized organizational structure has long been the norm. Ensuring that your organization is not top heavy and that it is as lean as possible facilitates strong relationships with employees and communication in all directions at all levels. Security can go a long way in making an employee — even one at the bottom of the organizational hierarchy — feel valued. Where the functional structure separates employees by their work, the divisional structure splits people on their projects, products or clients. For example, the buying process may vary by type of product. Ensuring that your organization has policies and processes in place to hold leaders accountable for their behaviors as well as results. Decision makers dole out tasks and projects in which they hold subordinates accountable. Freeing up employee time in this way also provides a less-stressful working environment and makes higher-ups less intimidating. This can speed up work processes and enable all players to feel equally invested in the business. The growth of the company can get out of control if it is not maintained by an effective corporate structure. It is also known as a flat hierarchy. So within the sales department, there may be mini departments dedicated to retail customers, wholesale customers, and so on. Another typical example is an advertising agency, where people are grouped by project instead of their job function.

In these forms of structure, communication is vital. However, companies can sometimes increase their effectiveness using multiple organizational structures.

What determines the effectiveness of an organizational structure

In order to keep your business going and profitable, you need to have the right kind of structure. This makes it possible for them to effectively carry out those tasks. A manufacturing firm, for example, may have a chemical mixing department, an assembling department, a packaging department, and so on. If they cannot, then you have a problem with your organizational structure. In many ad agencies, for instance, employees tend to handle many different areas of the business. Anything associated with accounts goes under the accounting department; everything associated with manufacturing goes under the manufacturing department, and so on. In a way, it is also an invitation for someone to contact a higher-up employee if he feels like he needs to because he has the information and the go-ahead to use it.

In other words, the leaders with strong relationship skills are most likely to develop into ideal leaders if they can learn competent business skills. A manufacturing firm, for example, may have a chemical mixing department, an assembling department, a packaging department, and so on.

For example, a company that relies heavily on direct sales may need to decentralize its sales and marketing functions by region.

Importance of organizational structure

Note that these organizational structures do not have to be used exclusively. In a way, it is also an invitation for someone to contact a higher-up employee if he feels like he needs to because he has the information and the go-ahead to use it. Span of Control This is less a form of organizational structure and more a way to determine how wide the organizational structure can be. It breaks up a company or organization into departments, such as sales or marketing. Companies that can eliminate duplication resources, including labor or raw materials, tend to operate more effectively. Freeing up employee time in this way also provides a less-stressful working environment and makes higher-ups less intimidating. They may be contributing successfully to the bottom line for the time being, but ultimately these leaders will create chaos and failure within your organizational structure, eroding profits through employee turnover and customer defection. There are also some important concepts attached to this kind of organizational structure. It involves lines of both authority and accountability as well as what kind of behavior is considered acceptable within the organization. Therefore, these companies create their organizational structures accordingly. If this type of leader sounds like a miracle worker, it is for good reason. Yet it is traditional in business that these people are rewarded and promoted for bringing bottom-line results to the organization without thought for the long-term consequences of their actions. Are employees doing only enough to get by or stay out of trouble? Specialization Work specialization is all about how tasks and jobs are distributed within the organization. A different kind of organizational structure is centralized.
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2 Keys for Organizational Effectiveness