Picking the best organizational structure for your company, division as well as the team is not like picking a tow truck for your use. It calls for a lot of research in knowing what you need and deciding how you need to go about it. In the world of organizational structures, the options you will have to choose from will include aspects such as chain of command, a span of control, and centralization, just to name a few.
An organizational structure is a visual diagram of a company that describes what employees do, how they do it, and whom they report to. It defines how decisions are made across the business. Organizational structures can make use of functions, products, markets, and geographies to cater to the specific needs of a business.
As a company gets bigger, organizational structures can be helpful for new employees to learn who manage different aspects of a business. There are different elements included in organizational structures and these include the following;
Chain of command
The chain of command defines how tasks are delegated and work is approved. An organizational structure allows you to define the chain or ladder a particular department should follow. It tells whom to do what. It defines how issues, requests, and proposals are communicated up and down the ladder.
Span of control
The span of control defines two things. These are; who falls under a manager, and which tasks fall under a department’s responsibility. There is also the issue of centralization.
Centralization describes where decisions are ultimately made. Once you have an established chain of command, you will need to consider which people and departments have a say in each department. When deciding on the organizational structure to follow, here are some to narrow on;
Also known as bureaucratic structures, they are structures known for having a narrow span of control as well as high centralization, specialization, and formalization. They are also quite rigid in terms of what specific departments are designed and permitted to do for the company. They may have a short or long chain of commands that is quite clear on what should be done.
Also known as a flat structure, this structure is known for its wide span of control, decentralization as well as low specialization. It is a model that might have multiple teams answering to one person and taking on projects based on their importance and what the team is capable of, rather than what the team is designed to do. The flexibility of organic structure can be extremely useful in helping businesses achieve faster growth.
Functional organizational structure
One of the most common types of organizational structures is based on common job functions. An organization with this type of structure would for example group all marketers together in one department and group all salespersons together in a different department. It would also group all customer service people in a third department. The leaders of all these departments would ultimately report to the CEO. The functional structure allows for a high level of specialization for the employees.