Business Organization Structure

Many businesses have an organizational structure, whether by design or through informal influences. These structures typically outline the upper management in a company and the different divisions or departments inside the company. Businesses often create a structure that best suits their operations or meets the industry standard.

Types

Centralized and decentralized organizational structures are the most common in businesses. Centralized---also known as tall---organizations rely on one individual to make important business decisions. Decentralized---also known as flat---organizations can have multiple managers or individuals responsible for major management decisions.

Features

Organizational structures can outline how a company completes various business functions. Business owners and managers also separate key business functions by this structure, ensuring one individual is not responsible for too many functions. Not only can this create a backlog of work, but it can also allow fraudulent activity to occur.

Effects

Managers and employees often work better in an environment with a clear structure and level of expectations. Owners can also resolve situations quicker if an individual begins to work outside of his normal responsibility.

References

• "Corporate Tides: The Inescapable Laws of Organizational Structure"; Robert Fritz; 1996