How to Identify the Top Organization Structure

Organization charts illustrate the company structure.

The structure of an organization depends on its size, purpose, number of employees, location and other considerations. An international manufacturing firm with thousands of employees requires a different kind of structure than a small, locally based ad agency. A multinational corporation may have branches that operate like individual companies with a set hierarchy, while a small company may thrive on a more horizontal structure that supports innovation. Every organizational structure must address issues that include accountability, control, efficiency and quality.

Instructions

Organizational Structure

1. 

   Identify the activities needed to accomplish the goals of the organization.

   Identify the activities needed to accomplish the goals of the organization. Then break these activities down into tasks that individual employees can perform. This results in job specialization, which makes the job easier to learn and supports organizational efficiency. The next step is grouping the individuals performing similar tasks into groups or departments.

2. 

   Department managers interact with top management.

   Consider using the traditional top-down management model. Companies often group their employees according to business functions, such as human resources, operations, sales and marketing, and accounting, and place an individual with expertise in the particular function to manage the department. In this model, a president or CEO heads the companies. Below the president, various vice presidents head divisions or functions. Middle managers act as liaisons between supervisors and top management. Supervisors monitor the activities of the individual employees in the department.

3. 

   A multinational corporation operates in different geographic areas.

   Think about which function or functions are most important to the success of your company. Some companies benefit by structuring according to department. A multinational corporation may find that a centralized management structure does not work well and may decide to organize divisions in different geographic areas to promote a local focus.

4. 

   Organize the company according to the product.

   Weigh the advantages of organizing the company according to the product. This kind of structure groups the activities needed to manufacture and market a product. It gives the top manager considerable autonomy over the operation and allows the group to focus on the product line and become experts in its development, production and distribution.

5. 

   Structure the organization according to the needs of the customer.

   Structure the organization according to the types of customers it serves. This works well with a distribution company that sells to consumers, government clients, and businesses. The company then creates divisions that meet the needs of these different markets. Employees become skilled at meeting the needs of these customers. Other types of companies may find this model works for them as well.

6. 

   The emerging organizational structure emphasizes team-based management.

   Identify the needs of the top organizational structure in the current marketplace of corporate mergers and restructuring. In the traditional model, decision making flows down from the top. The emerging trend emphasizes team-based management, creating a streamlined environment. This allows the company to become "agile" and able to adjust to rapid change. The new model incorporates both horizontal and vertical communication as well as customer input. Like the product-based organization structure, division heads have considerable autonomy.

References

• Chapter 8: Organizational Structure Outline
• Flatworld Knowledge: Organizing
• Encyclopedia of Business: Organizational Structure

Resources

• Liberate your Time by Developing your Company Organization Chart
• Organizing for Project Management