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Business

Essential elements of an Organizational Structure

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The success of every team, company or division is based on the organizational structure. An organizational chart is a diagram that indicates the structure custom-made to meet the goals of a firm. The structure must also assist the employees of the firm to comprehend their role in achieving the goals and fitting in the big picture. Also, the structure should be proper to enable the company to function efficiently. That is why it is necessary for every company to design a proper structure for the organization. An appropriate structure of organization ought to contain these elements to ensure that tasks are formally grouped, distributed and coordinated.

Work specialization

Work specialization is an essential element of a proper structure because it outlines tasks in an organization and divides them into separate parts. The feature is critical for distributing roles into various sections. The element also describes the individual who will carry out each task effectively. A business can use organizational chart software to aid in organizing its structure.

Departmentalization

After dividing tasks through job specialization, the next thing would be to collect similar functions for coordination. The features are divided into various departments in the organization. Some common forms of departmentalization include functional departmentalization, customer, geographical, product, and process departmentalization. Some organizations opt for rigid departmentalization while others for loose departmentalization. The two types depending on how free teams or departments are to interact and collaborate.

Chain of command

It is an unbroken authority line that runs from the top of the company to the bottom. The chain of command gives clarity on who is superior to the other and who reports to whom within the company. Also, the chain of command highlights the authority in a company. It gives rights of managers in various managerial positions, and how they are expected to give orders within the structure in the organization.

Span of control

It indicates the number of subordinates that a superior or manager can efficiently manage. A higher subordinate ratio suggests a more extensive span of control to superiors. The span of control outlines the number of managers and levels in a company. It ensures that a manager is given the number of subordinates he or she can manage effectively and efficiently for the success of an organization.

Centralization and decentralization

The element is essential in organization structures because it highlights how decisions are made in the company. A centralized structure is where decisions are concentrated at a single point in a company. A decentralized structure refers to a structure where the decision-making process is spread out to various parts of the company. Decentralized structures are more democratic than centralized structures. However, they slow down the decision-making process, which makes hard for businesses to run efficiently.

Formalization

It is an element that deals with the manner in, which tasks are structured with the company. Unlike specialization, formalization puts into consideration how mechanisms, rules, and procedures govern activities and functions. Formalization outlines procedures that cover work procedures.

Organization structures are integral in explaining how tasks are distributed. Companies ought to design a structure that incorporates these elements to ensure its success. A poorly designed structure confuses duties and responsibilities, slow decision-making processes, a confusing morass of contradictions, and failure of coordination among functions.

 

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