Organizational structure can be defined as a system which is able to outline some major activities which are directed towards the achievement of organizational goals. The activities include, the rules, responsibilities and roles. Organizational structure is helpful in the determination of the ways by which information is able to flow between different levels. The structure of an organization is mainly dependent on the strategy and objectives. The structure which is centralized in nature provides maximum levels of power to the top management for making the decisions related to different organizational activities (Ashkenas et al. 2015). The report will be based on the analysis of the ways by which organizational structure is able to affect the success of the organizations.
As discussed by Barrick et al. (2015), the ways by which lines of authority, duties and rights of the organization are arranged are considered to be an important part of organizational structure. Organizational structure is further able to determine the roles and responsibilities of employees. The power related to decision making is also divided in an effective manner with the help of proper organizational structure. Different organizations implement different types of structures which are dependent on the operations. The organizational structures are based on many different aspects among which two major aspects will be discussed below,
Span of control – This is considered to be a major aspect of organizational structure which is able to affect different modern companies. The number of employees who work under a single manager is defined with the help of span of control. The departments which are thereby present in the organizations are helpful in defining the span of control. The organizations are thereby divided into departments based on number of employees who are a part of a single area. The departments in organizations are structured based on the functions which are played by different products and the customers. Departments operate under different managers and some employees are a part of the concerned areas (Camisón and Villar-López 2014). The organizations which implement functional organizational structure form departments which are based on finance, accounting and marketing. The organizational structures which are customer based in nature are used when the company serves huge variety of clients which include corporations and consumers. The span of control is therefore based on the departments which are formed within the organizations. Number of employees who belong to a particular department are thereby under the control of the managers or leaders of that particular department (Chang, Chen and Chiou 2015).
Height – This is considered to be another major aspect which is able to affect the organizational structure of different organizations. The levels which are present between the top management of an organization and the employees who belong to the lower levels is related to the height. Many different organizations implement flat organizational structures. The small organizations on the other hand hire the employees in different fields which include, engineers and accountants. Small companies may thereby be based on the lesser levels related to management (Cummings and Worley 2014). Large companies have taller organizational structures which is helpful in dividing the workload among the employees.
As discussed by Dosi and Marengo (2015), organizational structure is able to play a key role in the success which is gained by the company in the industry. The smaller organizations tend to develop flat organizational structure which consist of lesser number of management levels. On the other hand, large companies develop organizational structures which are comparatively taller. The organizational structure is thereby able to play different roles in success and proper management of the organizations as well. One major role which is played by organizational structure is related to increasing the levels of efficiency. The organizations are able to use the resources to fullest capacity with the help of proper organizational structure.
According to Eccles, Ioannou and Serafeim (2014), the organization will further structure the organization with respect to the products and the services which are offered to customers. The duties related to product management are thereby based on types of customers. Harnessing the levels of experience is another important factor which is able to affect the organizational structure in a huge manner. The organizations are further arranged with respect to specific functions which are conducted by them and accomplishment of the projects and tasks. The levels of synergy which exist among the skilled employees is arranged in an effective manner with the help of organizational structure.
As discussed by Friedman (2017), the decision making based capabilities of the organization are also affected in a positive way by the structure of the organization. The companies can thereby structure the departments in such a manner which is helpful in making the best possible decisions. The regional managers are capable of making the local decisions related to needs of the consumers in an easier way as compared to the marketing manager who operates in a distant office. Different organizational structures are used by the companies for communication related purposes. Communication is able to play a key role in the proper operations of different levels of management.
According to Morden (2016), the most effective manner of communicating is from top level of the organization to the bottom levels. The executives aim at creating different operational procedures which are further communicated to the managers and directors. The span of control is also decided with the help of proper organizational structure. A proper organizational structure is thereby based on the ways by which the company is divided into different departments. Effective operations of the organizations are thereby based on the development of proper organizational structure.
As discussed by O’Reilly III et al. (2014), organizational structure is based on the ways by which the companies are able to communicate, distribution of responsibility and the adaption to change as well. The organization thereby needs to develop a structure which is effective and dynamic in nature. The structure therefore needs to productive and lead and the company also needs to adapt to the changes in order to grow as well as survive in the industry. The structure of an organization is thereby able to facilitate many different functions which include, enhancing the internal communication, making business related decisions, providing exceptional levels of customer service and further running the organization smoothly.
According to Rothaermel (2015), the profitability levels and growth of organizations are promoted by the organizational structure. The management is able to recognise the levels of talent which need to added to the organization. Reporting relationships within the organizations are also developed with the help of the structure. The structure of the organization is able to provide the employees with standards of performance and proper job description as well. A proper framework is developed for establishment of levels of compensation based on each position. The high performing employees are provided with effective room for growth with the help of proper organizational structure.
As discussed by Rothaermel (2015), the modern companies need to develop appropriate organizational structure in order to provide the employees with effective levels of opportunities. The development of organizational structure is considered to be an important factor which is able to affect the operations and levels of profitability as well. The success of organizational operations is largely dependent on the structure which has been developed. The company thereby needs to develop the organizational structure in such a manner which will be able to provide effective levels of opportunities to the employees to grow. The growth of employees is thereby an important part of the development of proper organizational structure.
The organizations are thereby able to operate in an effective manner if the structure is developed in an efficient manner. Most important part of the development of leadership style is related to the ways by which the company is able to increase the levels of profitability. Organizational structure can thereby be considered to be the most important factor which is able to affect the operations of the modern organizations. The work process of employees is also affected by the ways by which the management is able to develop an effective structure (Tseng and Lee 2014).
Conclusion
The report can be concluded by stating that organizational structure is the most important part of successful operations of the organizations. The levels of profitability of the organizations are also affected in a huge manner by the ways by which organizations are able to develop the structure. The work process of employees is also affected by the structure of the organization. Organizational structure is thereby considered to be the most important factor which can change the ways by which the organizations operate. The development of employees is also affected in a huge manner by the structure which is formed and followed by the company. The analysis has thereby depicted that the structure of an organization is able to contribute to the levels of success.
References
Ashkenas, R., Ulrich, D., Jick, T. and Kerr, S., 2015. The boundaryless organization: Breaking the chains of organizational structure. John Wiley & Sons.
Barrick, M.R., Thurgood, G.R., Smith, T.A. and Courtright, S.H., 2015. Collective organizational engagement: Linking motivational antecedents, strategic implementation, and firm performance. Academy of Management journal, 58(1), pp.111-135.
Camisón, C. and Villar-López, A., 2014. Organizational innovation as an enabler of technological innovation capabilities and firm performance. Journal of business research, 67(1), pp.2891-2902.
Chang, T.Z., Chen, S.J. and Chiou, J.S., 2015. Management leadership behavior and market orientation: The relationship and their effects on organization effectiveness and business performance. In Marketing, technology and customer commitment in the new economy (pp. 276-281). Springer, Cham.
Cummings, T.G. and Worley, C.G., 2014. Organization development and change. Cengage learning.
Dosi, G. and Marengo, L., 2015. The dynamics of organizational structures and performances under diverging distributions of knowledge and different power structures. Journal of Institutional Economics, 11(3), pp.535-559.
Eccles, R.G., Ioannou, I. and Serafeim, G., 2014. The impact of corporate sustainability on organizational processes and performance. Management Science, 60(11), pp.2835-2857.
Friedman, S.D., 2017. Succession systems in large corporations: Characteristics and correlates of performance. In Leadership succession (pp. 15-38). Routledge.
Morden, T., 2016. Principles of strategic management. Routledge.
O’Reilly III, C.A., Caldwell, D.F., Chatman, J.A. and Doerr, B., 2014. The promise and problems of organizational culture: CEO personality, culture, and firm performance. Group & Organization Management, 39(6), pp.595-625.
Rothaermel, F.T., 2015. Strategic management. McGraw-Hill Education.
Tseng, S.M. and Lee, P.S., 2014. The effect of knowledge management capability and dynamic capability on organizational performance. Journal of Enterprise Information Management, 27(2), pp.158-179.
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