An organizational structure defines the scope of acceptable behavior within an organization, its lines of authority, accountability and to some extent the organization’s relationship with its external environment.1 A structure shows the pattern or arrangement of jobs and group of jobs within an organization, yet it is more than an organizational chart. The organizational structure pertains to both reporting and operational relationships, provided they have some degree of permanence. The individual elements of an organizational structure typically includes a variety of components which are:
- Departments or Units
- Management hierarchy
- Rules & procedures
Businesses require structure to grow and be profitable, otherwise, you would have people pulling in all sorts of different directions. Planning the structure ensures there are enough human resources with the right skills to accomplish the company’s goals. It also ensures that responsibilities are clearly defined i.e. each person has a job description that outlines duties, and each job occupies its own position on the company organization chart.
Some of the beneficial outcomes of organizational structures are listed below
1. Organizational Structure Allows For Better Communication
The flow of communication is essential to all the organization’s success. The organizational structure should be designed with clear lines of communication and the flow of authority clearly identified. This makes communication clearer, easier and eliminates ambiguity.
2. Organizational structure helps with clear reporting relationships
Reporting relationships must be clear so all members of the organization understand what their responsibilities are and know who is accountable; otherwise, responsibility for a task may fall through the cracks. These clear relationships make it easier for managers to supervise those in lower organization levels. Each employee benefits by knowing whom they can turn to for direction or help. In addition, managers are aware of who is outside the scope of their authority, so they do not overstep their bounds and interfere with another manager’s responsibilities.2
3. Elimination of Work Duplicates
Duplication of work exists when work distribution is not clearly stated or identified and the work is performed in a disorganized way. Since good organizational structure requires that the duties be clearly defined and assigned, such duplication of work is eliminated.
4. Task Completion
A well-designed organizational structure facilitates the completion of projects and tasks. Project managers can better identify the employees available to them if the scope of each department’s responsibility and each team member’s capabilities are clear.3
5. Effective planning
If the goals are clearly established and resources clearly identified, short term and strategic planning become more focused and realistic as such planning becomes more effective.
6. It results in increased cooperation and a sense of pride among members of the organization
An employee is given sufficient freedom within the domain of his responsibility and his authority. Since the authority and the extent of the exercise of such authority is known, it develops a sense of independence among employees which in turn boosts their morale.4
7. Organizational structure encourages creativity
A well-structured organization encourages creativity by developing among employees a high sense of belonging and also, recognition of skill and appreciation for their contribution towards organizational growth helps the employees develop their own initiative and a spirit of innovation and creativity.
8. Growth And Expansion
Organizational structure helps companies grow rapidly by making use of their resources. A good structure ensures that companies have the right people for the right position which in turn positions the organization for growth and expansion.