Use the right structure to meet business objectives
An organisational structure defines how activities such as task allocation, coordination and supervision are structured to achieve the company’s aims. Organisational structures have been around since ancient times with the hunters and collectors in tribal organisations, through highly royal and clerical power structures, to today’s post-industrial structures.
The correct organisational structure for a particular company is important because:
- It provides the foundation on which standard operating procedures and routines rest.
- It determines which individuals are involved in the different decision making processes and to what level.
- It affects the effectiveness, efficiency, and performance of the company.
- A wrong organisational structure may hamper cooperation and communication.
- Simple structures improve learning, improvisation and innovation.
The main types of organisational structures include:
- Pre-bureaucratic structures – The business owner makes all key decisions and most communication.
- Bureaucratic structures – Involve clearly defined roles and responsibilities, a hierarchical structure, and respect for merit.
- Post-bureaucratic – Involves the shift in focus from organisational structure to the organisation’s culture.
- Functional structure – Consists of activities such as coordination, supervision and task allocation.
- Divisional structure – Consists of self-contained divisions.
There are advantages and disadvantages with each type of organisational structure. A company needs to review its objectives and business to ensure they have the most beneficial organisational structure in place.