An organization is basically a group of people who collectively work to achieve common goals. Division of responsibilities under a ranking system is the backbone of any organization. In order to understand an organization, we need to take a close look at its organizational structure. This will tell us how all members of the organization function.
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Organizational Structure
Every organization comprises of people who run it. These people share common goals and objectives. In order to achieve them, these people also share roles and responsibilities with each other.
An organizational structure is simply the pattern or network of division of these roles and responsibilities. Thus, which person has to perform which task is what the organizational structure explains. Such a structure also depicts the hierarchy in which members of an organization rank themselves.
An organizational structure is not an end but rather the means to an end. Members of an organization create it just to achieve their common aims. When people divide responsibilities and coordinate with each other, it becomes easy to function. This is basically the entire purpose of an organization structure.
Purpose of Organizing
As we saw above, an organizational structure is not an end but a means to an end. Every organization strives to achieve its targets and its structure only facilitates this.
The main purpose of such a structure is to help the organization work towards its goals. It brings members of the organization together and demarcates functions between them.
Secondly, the structure also helps in ensuring smooth and efficient functioning. In other words, it reduces time, money and efforts. This happens only because every person knows what her responsibilities are. Work happens with precise coordination with minimum wastage of resources.
Browse more Topics under Organizing
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- Centralization and Decentralization
- Formal Organization- Line Organization
- Formal Organization- Functional Organization
- Formal Organization- Line and Staff Organization
- Formal Organization- Project Management Organization
- Formal Organization- Matrix Organization
- Informal Organization
Nature of an Organizational Structure
The structure of an organization should always be dynamic. A static and rigid structure only creates difficulties and hurdles. The structure must conform to requisite changes at all times.
The main reason for this requirement is that external environments influence all businesses. For example, social, technological, economic and political factors play a huge role here. As a result, the organization must be able to adapt to these changes at all times.
Furthermore, it can become necessary for an organization to hire more employees or cut down its task force. External factors are responsible for this as well. If that happens, the structure always must be flexible enough to mend itself.
Finally, an organizational structure must be clear. Each member must expressly know what her responsibilities are. Ambiguities in the division of responsibilities create many problems.
Development of an Organizational Structure
Every time an organization creates its structure, it has to consider various factors. Since there are no fixed rules for this purpose, some common guidelines can be of great help. Here are some considerations one always must keep in mind while designing such structures.
1. Clear Definition of Objectives
Firstly, the main objectives of the organization must be absolutely clear. These objectives determine what kind of structures are required. A standard structure can never suit every kind of organizations.
2. Identification and Grouping of Activities
The next step here is to identify activities that members of the organization have to perform. Since every business activity requires many tasks, clear identification of them is important. After identification, it is necessary to group these activities into classes on the basis of their nature.
Almost all business organizations have various departments looking after various functions. For example, there can be production, marketing, accounting, and human resources departments.
3. Determination of the Structure
After completing the first two steps, the organizers finally determine the overall structure. He defines the ranks and hierarchy in which people will function. Creation of departments also happens in this step. Consequently, managers and employees become aware of their exact roles and responsibilities.
4. Revision of the Structure
Once the structure starts functioning, it can show up problems and shortcomings. For example, the marketing and sales departments often perform similar functions. Consequently, this can show up difficulties in the clear demarcation of work between them.
The organizers must always try to find such problems and resolve them. This the reason why organizational structures must be flexible and not rigid.
Solved Examples on Organizational Structure
Question: Mention the missing word in the following sentences.
1. An organizational structure divides __________ and __________ amongst members.
2. Structures must always be __________ because they should be able to adjust to changes.
3. Organizers can divide functions into __________ depending on their functions.
Answers:        (1) roles and responsibilities        (2) dynamic        (3) departments
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