The Strengths and Limitations of an Organizational Structure
An organizational structure creates a hierarchy within an organization and enables smooth transmission of information from one department to another. An organizational structure has its strengths and its limitations that can affect its efficiency. A proactive business owner learns to identify those strengths and limitations and creates contingency plans to deal with challenges.
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Communication
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An organizational structure creates a framework of responsibility that greatly improves corporate communication. When an issue arises that affects the job responsibilities of several people, an efficient structure identifies those people and moves the data in their direction. A strong communication framework also prevents information from getting to people that do not need to see it. For example, maintaining a corporate structure can keep future personnel moves from being revealed to the staff before management has a chance to lay the groundwork for releasing the information formally.
Internal Issues
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A company needs to have policies in place that deal with internal issues, such as insubordination, turnover and employee tardiness. All of these issues affect productivity, and they all need to be monitored by management. A strong organizational structure creates a system of accountability that allows managers to keep track of internal issues, recommend a plan of action and then follow up on the results of that plan. A good corporate structure creates a sense of accountability that managers can use to help escalate internal issues that need further consideration or use departmental resources to deal with minor issues.
Unique Situations
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Sometimes a corporate structure can be so efficient that every issue and piece of communication are funneled into the structure. If there is a way to categorize data, then it can move along a strong organizational framework and keep the company moving forward. But special situations, such as employee personnel issues or unexpected changes to product design, can get caught up in a framework that does not recognize them. In order to create a truly efficient organizational structure, it needs to be flexible enough to accommodate change. But dealing with unexpected situations can be problematic even in the best corporate framework.
Growth
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A corporate structure can accommodate the organization that created it. Over time, the structure evolves to best serve the company. But as the company grows, problems can arise within the corporate framework. New levels of management are added and departmental responsibilities are changed, and these create issues with the organizational layout. A company needs to be consistently updating its organizational structure in order to accommodate growth. If the structure is not scalable, then the company can become inefficient and unproductive as it grows.
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