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The Importance of Organizational Structure

An organization consists of structure, responsibilities and coordination. The structure of a company can take many different forms but the most common is hierarchical. A supervisor is responsible for managing the activities of a number of people. The larger the organization the more levels the hierarchy will have. A well-defined structure clarifies the responsibilities of all members of the organization as well as the relationships with others. Organizational structure is the key to unity of purpose.

Organizational Structure Must Be Clearly Defined – People must understand what their role is in the organization in order to be productive. In a general sense a person must deal with 3 types of relationships – superiors, peers and subordinates. Organizational structure tells people what their relationships with others are and defines the parameters for interaction. The more tightly an organizational structure is defined the more efficiently the organization will run.

Responsibilities Must Be Understood – Members of an organization must understand what they’re responsible for and who they’re responsible to. If people are left to their own devices relationships will form but they may not be equitable and efficient. Well defined policies and procedures allow people to successfully produce and contribute to the success of the organization.

Procedures Must Support Work Flow – Structure and organization must be established with work flow in mind. Often policies are enacted with control as the sole objective. Controls are not wrong – they’re a necessary part of any successful organization but without considering the impact on workflow controls can be detrimental. This sometimes occurs when managers overreact to problems. They enact controls that serve to disrupt or inhibit workflow rather than support it. For organizational structure to be effective it must support coordination and cohesion.

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