The Significance of an Appropriate Organizational Structure

Companies need to choose the right organizational structure to be successful.

Utilizing the proper organizational structure is an important step to having an effective business. The structure serves as the foundation for how a company communicates and divides power. It is also a mechanism that will either promote change or make it more difficult to prosper, according to authors Steve L. McShane and Mary Ann Von Glinow in "Organizational Behavior: Emerging Realities for the Workplace Revolution."

Function

Organizational structures are developed to create an environment that complements the goals and values of an organization. They are usually used to create change that will allow the company to be innovative and competitive in their respective market.

Considerations

When choosing a specific structure, an organization should review certain information. Some of these topics could include the size, location and culture. The number of departments and upper-level managers is also another factor to consider, because the purpose of an organizational structure is to increase the effectiveness of communication among the levels of power within a company to maximize productivity.

Types

There are many types of organizational structures that have their own advantages and disadvantages. Some of the most recognized structures are the simple, functional, divisional and matrix. A company should carefully choose a structure that complements its standards. For example, a smaller business with only a few departments should consider a line structure, which follows a traditional formula that makes decisions from top to bottom.

References

• "Organizational Behavior: Emerging Realities for the Workplace Revolution, 3e"; Steve L. McShane, Mary Ann Von Glinow; 2005