How to Create Effective Organizational Structure

Organizational structure refers to the pattern or structure of jobs in an organization. A structure is composed of departments or divisions within a specific management hierarchy. It should also provide a set of rules and procedures for each department as well as a rough outline of high-level goals. The pattern established is often used in both operations and reporting guidance.

Instructions

1. Determine the goals of your structure by asking questions about the purpose and function of your business. Consider organizational structures from both a strategic and tactical perspective.

2. Identify your current structure and/or the structure you want. Map it out using a flow chart. Organizations can move from a tall (many levels of management) to a flat (fewer levels of management) structure. They can move from a functional (finance, marketing, sales) to a product division (one product team for each product) structure. Global organizations may have a trans or multinational structure.

3. Consider the relative strength and weakness of various organizational forms. Understand the legal ramifications of each structure on your business.

4. Use strategic goals to help form the structure. The goal is for operations to be as flexible and agile as possible; this is the mark of an effective organizational structure.

5. Build in a chain of command that empowers employees to greater productivity. An effective organizational structure should facilitate communication. Provide a clear set of procedures to create and/or make process improvements.

6. Communicate and distribute the structure throughout the organization. The most effective method of distribution is often through administration.

References

• Org Structure

Resources

• Flow Chart Example: Organizational Structure