The Importance of a Organizational Structure

The importance of an organizational structure involves assisting business owners, CEOs, and entrepreneurs to conceptualize, visualize, and construct a hierarchical system to be implemented into their organization. For example, the building blocks of an organizational structure include: a chain of command, span of control, departmentalization, distribution of authority, and organization height.

Chain of Command

An organizational structure involves a chain of command which determines and defines: job positions, who makes the decisions, and who's accountable for various duties.

Span of Control

Span of control determines and quantifies the actual amount of employees a manager supervises.

Departmentalization

Departments within an organization structure are sections of the structure divided into functional divisions (such as the Sales Department) relevant to specific tasks. Determining what activities, tasks, and talents are to be grouped to best achieve an origination's objective is called the departmentalization process.

Distribution of Authority

Distribution of authority determines if decision-making authority is concentrated among a few high-level figures commonly seen in bureaucratic organizations or is the authority shared and distributed throughout a variety of departments working closet to the their corresponding tasks.

Organization Height

Organization height defines how many departments, divisions, and layers there are between the highest levels and the lowest levels of an organization.

References

• Purpose of Organizational Structure
• Distribution of Authority
• The Fundamentals of Top Management