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Developing Effective Organization Structure
The success of any organization depends on its structure i.e. how the work activities are organized, how the responsibilities and authority are identified. The core structure of an organization depends on its functional domain. Organizational structure design or architecture the framework through which any organization targets to realize its core qualities as directed in its vision statement. it provides a complete and viable infrastructure into which business operations are deployed. It also ensures that the core qualities are realized across the business management deployed within the organization.
Any poor organizational structure will negatively affect the operational and financial viability of any organization. If the organizational structure has a flawed design, it simply won’t function well. The structure should support the function and the business strategies.
Significance of organizational structure:The structure of the organization contributes to the organizational efficient functioning in following ways:
- Clear – cut authority relationship
- Patter of communication
- Location of decision centers
- Proper balancing
- Stimulating creativity
- Proper balancing
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Types of Organizational Structure:On the basis of activities arrangement, different types of organization can be structured.
- Functional Structure: The structure where units and sub units of organizational activities are on the functional basis. Specialized functions in any industrial organization like manufacturing, marketing, finance constitute separate units of organization.
- Divisional Structure: Here, independent divisions are structured under the overall control of the head office. The organization is divided into smaller business units. Each divisional manager is given autonomy to run all functions relating to the product or market segment or regional market.
- Matrix Structure: In this structure there are functional departments which specialized team employed to work full time in the projects, sometimes they are utilized to work in more than one project by the concerned project manager. Once the project s finished, they get back to their respective functional departments and the project manager gives them different projects.
ORGANIZATIONAL DESIGN:The meaning of organizational design is the process of coordinating the structural elements of the organization in the most appropriate and effective manner. Followings are some widely accepted organizational designs.
Classical form of Organization: The classical organizational form includes the following design structure:
- Simple Structure: It is normally a flat type of organization with two or three vertical levels with a loose body of employees and decision making author is centralized around one individual. It is a small organization.
- The Bureaucracy: It is the most common form though not very ideal form of modern organization. Its strength is to perform standardized functions. The most common form of organization is the classical bureaucratic structure.
Alternate Organization Design: There are three broad types:
- Team Structure:It employs the team as a central organizational body to perform and coordinates organizational operations where the employees in the team are both generalists as well as specialists.
- Virtual Organization: Structurally, virtual organization is highly centralized with no departmentation. It is frequently used to outsource manufacturing activities.
Organizational and Mechanistic Design: Organizational design has two models.
Mechanistic Model: It includes following features:
- High formalization
- a limited information network; and
Organic Model: The features of organic model:
- cross hierarchical and cross functional teams
- Low formalization
- Comprehensive information network
- High participation in decision making
Characteristics of Effective Organizational Design: