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Developing Effective Organization


Structure
Business

Introduction
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 wont 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:

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Clear cut authority relationship

Patter of communication

Location of decision centers

Proper balancing

Stimulating creativity

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Proper balancing
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Types of Organizational Structure: On the basis of activities arrangement,


different types of organization can be structured.
1.

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.


2.

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.

3.

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.

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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:
.extensive departmentalization
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High formalization

a limited information network; and

Centralization
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:

Simplicity

Flexibility

Reliability

Economy

Acceptability

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