Organizational Structure & Strategy

An organizational structure (OS) defines a company's hierarchical composition and how positions relate to each other. Work flow also is characterized by this structure. Every employee is informed of the prevailing reporting configurations.

Significance

Organizational structure is imperative for the company in formulating its strategies of operations. Top management recognizes the productivity and output levels of each individual employee in the organization. Management then takes appropriate steps to accentuate the skills of the performing employees and train the non-performing ones on how to improve.

Function

Once an organizational structure is in place, the company's staffing levels across all of the departments are highlighted. Management and the human resources department contrast the present existing levels and the optimum levels required. They then take measures to transfer employees from the over staffed departments to the under staffed ones.

Types

The company must choose an organizational structure that is best suited, keeping in mind its operations and size. The are two main broad types of organizational structures: the tall and the flat, according to DocStoc.com. Large companies use the tall organizational structure. In this way, they are able to centralize authority and departmentalize all important functions. Small companies use the flat organizational structure. Here there are few levels of command between the employees and the owners of the business.

References

• DocStoc: Purpose of Organizational Structure
• Organizational Structure: Organizational Structure Types and Design Strategy