importance of organizational structure

Simplified organizational structure. (iii) Combine task in a logical and efficient manner. Sound organisation is a fine mecha­nism enabling people (living things) to collaborate and work together for integrated effort. A sound organisation structure encourages better relations between the worker and the management, and increases employee satisfaction and decreases employee turnover. Organisational structure means a developed enterprise being operated to achieve the given goals. It cannot be seen. Copyright 10. This helps in the better use of individuals working in the enterprise. v. It is more than a chart—it is the best mechanism for mana­gerial leadership, co-ordination and control. An organization is basically a group of people who collectively work to achieve common goals. Facilitates Training and Development of Managerial Personnel: 10. Following are the advantages of a sound organisation structure: 1. A definite organisation structure leads to smooth running of all its operations. Organizations that cover a span of geographic regions structure the company according to the geographic regions they operate in. 4. Sound organisation stimulates creative thinking and initiative on the part of employees. … job rotation, job enlargement, delegation etc. 14. Facilitate Administration: 4. Content Guidelines 2. Moreover, lowest levels of the department should be given with decision making responsibility. 4. (ii) Divide the total work load into tasks that can logically and comfortably be performed by individuals or groups. Brings unity in direction, facilitates control and co-ordination – Efficient delegation and. The structure of such policies should be such as to uphold the principles of transparency, accountability, fairness, and responsibility. It encourages creativity, i.e. There is proper allocation of work. Organizing is an important means of creating coordination and communication among the various departments of the organization. Importance of organizational behavior: It is very important to study organizational behavior because it provides an understanding of why people behave as they do in organizations.In any organization, the importance of organizational behavior has tremendous necessities. A flexible organisational structure is needed to adopt a new technology. The aim of this work is to examine the importance of organizational structure in effective management of general cotton mill Onitsha on issue affecting the management and employees. Organizations need to be efficient, flexible, innovative and caring in order to … Very often we see that companies switching their focus from markets to products or competitors, rather than looking at the big picture. Most companies either have a tall or flat organizational structure. Organisational structure lays down both channels and the patterns of communication. Sound organisation helps in keeping the various activities under control and increase the capacity of the enterprise to undertake more activities. Please, sit back and study the below research material carefully. Fosters Co-Ordination 4. It facilitates attainment of the objectives of the enterprise. Facilitates Administration 2. Persons are allowed to try new ideas for improving upon their work. How strong is the link between structure and business performance? An organisation is a framework of various relationships amongst the individuals working in an organisation. Privacy Policy 9. Delegation helps people at lower levels to do more challenging work. All these factors assure stability. It helps an organisation in the following ways: It helps individuals to enlarge their capabilities. Following are some of the important advantages of a sound organizational design which have enhanced its importance and have, therefore, made it indispensable: The function of organizing is required for the performance of other functions of management like planning, staffing, directing and controlling. It Prevents the Growth of Laggards, Wirepullers, Intriguers or other Forms of Corrupters: As a matter of fact, experience shows that corruption can only thrive in those enterprises which have failed to set up a sound organisational structure. The structure should clearly determine the reporting relationships and the flow of authority as this will support good communication – resulting in efficient and effective work process flow. She concluded that technology is a major influence on organisational structure. Organizational structure allows the expressed allocation of responsibilities for different functions and processes to different entities such as the branch, department, workgroup, and individual. Effective organisation enables growth and diversification through decentralisation and divisionalisa­tion on geographical or product basis. These training institutes are collecting data directly from the field used in the training. A small company or one operating in a very competitive market could opt for such a structure. The effectiveness of an enterprise is measured by the reaction of staff members to the adopting of a new technology. The structure of the company can be changed whenever the growth and expansion activities are carried out. Even in SME’s, we require a well-defined structure. Prohibited Content 3. A company's hierarchy allows employees on different levels to identify the chain of command and serves as a reference point for decision making. The top level executives perform the functions, like planning, organising, staffing, directing, controlling the lower level people. Plagiarism Prevention 5. In this regard the following factors to be considered in designing an effective organisational structure: It is an important factor affecting the organisational design. Sound organization structurecan contribute greatly to the survival continuity and stability of the enterprise. 5. Since total work cannot be performed by the manager alone, it must be divided among its staff in a well-planned manner. The growth of business means an increase in the scale of operation and diversification means starting of production of a new type of products. The organizational structure of a company affects which department is powerful, which department takes more decisions or which department has less power.. Poor organisation leads to improper arrangement of duties and responsibilities. Every organization has a structure which defines the hierarchy, the distribution of roles or the responsibilities within the organization. An organisational structure is defined as the pattern or network of relationships that exist among various positions. Content Guidelines 2. There are many types of organizational structures. There is a need for coordinating the working of various segments. Organizational structure is the chain of hierarchy, which divides entire employees of an organization based on their level, roles, and responsibilities. It helps in growth and diversification of the activities of an organisation. As a result, unimportant and trivial issues are given top priority. 7. With the passage of time, however, even a good organisation may be transformed into a bad one unless continual adjustments are made with the varying circumstances. The Importance of Organizational Structure in Effective Management. A well-structured organisation also encourages co-ordination and co-operations amongst all the individuals in the organisation. Effective management implies managerial adaptability to changing situations within the dynamic framework of an organisational structure. Changes in the organisation may result in the appointment of additional staff members, de-centralisation of authority and responsibility, raising of additional capital, identification of the consumer’s satisfaction and preferences, expansion of sales promotion activities and the like. Proper organisation provides .satisfaction and various incentives to employees. If you’ve had a job, you likely worked in a functional organizational structure.The functional structure is based on an organization being divided up into smaller groups with specific tasks or roles. “A well-defined and sound organisation makes sure that there is proper co-ordination between all the activities. It promotes effective leadership and thereby ensures good employee morale. Only through coordination of the different tasks are we able to attain the collective goals. We may have top manage­ment in the hands of a few chief executives forming a top level executive committee running the affairs of very big enter­prise. For example, you will absolutely design your sales team to be in direct communication with your development team. 7. But once the business starts to grow and separate departments are created for buying, selling, accounting, administration and so on, the need for organisation undoubtedly grows with it. Organisation is one of the basic functions of management. No one gets into any sort of wrong and misunderstood communication as in every sort of the structure, the works are somehow divided and it forms the best part of the organizational structure. The functions like co-ordination and control require a proper division of various functions and their assignment to suitable persons. Activities that should be integrated or centralized are spread out and put to improper supervision. In short, existence of a good organization structure is essential for better management. A sound organisation structure facilitates growth by increasing its capacity to handle increased level of activity. Importance of Organization Structure. It creates an environment where people can work effectively. Having an organization structure is for purpose of being organized is to achieve goals and objectives by fully utilizing available resources. It also provides for the channels of communication for the co­ordination of the activities of different departments. These are assigned different duties for achieving business objectives. 7. Organisation is also essential for the continuity and stability of the enterprise. 2. Every enterprise has a number of departments and sections. Places Proportionate Importance to the Various Activities of the Enterprise: 9. 9. Ensures Optimum Utilisation of Material Resources and Human Efforts: 6. Organisational deficiencies give rise to a number of inefficiencies, e.g. The job training is much better and gives good results as compared to class room training. The design of the organisational structure would depend upon whether the technology is simple and routine requiring few repetitive tasks. Abstract. Sound organisation has flexibility and also stability. Permits Optimum Use of Resources 7. It Promotes Growth and Diversification: Only sound organisation designed on scientific principles can create conditions conducive to planned expansion and diversification of the activities of the enterprise. This is referred to as the division of work. A flat organization is one where there are fewer layers of management, making communication to the top of the organization quicker. Development of manpower – A sound organisation aims at continuous improving its human resources. Proper division of work – Organising provides proper assessment of total work to be performed and its division among workable departmental units and individuals. Sound organisation is a must for every enterprise not only for its continuity but also for its success. Businesses require structure to grow and be profitable. Proper delegation and decentralisation helps development of managers. Talents and resources are put to good use. (v) Monitor the organisational structure’s effectiveness and make adjustments as needed. Encourages Initiative 14. Importance of Organisational Structure 3. It is the backbone of a management and without it; no management can manage the various operations of an enterprise. It is a combination of many factors, such as management style, management values, the formal organisation (rules, policies, procedures, practices, organisational structure, reward system) informal organisation (norms of behaviour beliefs, values and attitude of the group) the communication system and all other managerial systems. Sound organization structure is important due for the following reasons: Chain of Command – Organizational Chart supports administration by explaining the flow of command. #2. Sound organisation is a must for every enterprise not only for its continuity but also for its success. Human relations improve in a good organisational set up. Sound organisation develops the morale, honesty, devotion to duty and loyalty of business organisations. Facilitates administration: Sound organisation helps in the performance of management functions like planning, staffing, directing and controlling. These organizational cultures are important because they can encourage employees to work in different ways. Entire organisation environment and climate is favourable for productivity and job satisfaction. Its importance lies in the systematically evolved pattern of relationships designed to set in motion the processes of managerial functions. With these general remarks, now we state here the important advantages of organisation: Organisation aids management in accomplishing enterprise objectives. It facilitates administration by avoiding waste motions, overlap in work and duplication of effort. It ensures, above all, accomplishment of objectives and strategies. A sound organisational structure facilitates the optimum use of technological improvements such as automatic techniques of production, control devices, computer system etc. iv. A good organizational structure facilitates attainment of objectives through proper coordination of all activities: ADVERTISEMENTS: It has a built-in system of “checks and balances” so that the progress towards the attainment of objectives is evaluated along the way so that any required adjustments can be made and any new decisions required can be taken. It disposes of conflict between individuals; individuals and the enterprises, enterprise and the economy as a whole. Huge Collection of Essays, Research Papers and Articles on Business Management shared by visitors and users like you. Designing an organization structure … Sound organisation (as a founda­tion for management process) can provide following typical results: i. From the facts indicated before in this chapter, organisational structure refers to the way in which an organisation’s activities are divided—Organised and coordinated. The organization responds more quickly and efficiently to market needs, and focuses efforts solely on the objectives of each business un… It’s a rather complex issue. It Stimulates Independent, Creative Thinking and a Spirit of Initiative through Well-Defined Areas of Work: An ideal organizational structure based on clear-cut demarcation of authority, higher range of responsibility, discretionary freedom granted to personnel, incentives offered for specialized work etc., will certainly foster the spirit of constructive and creative approach in management. It is the means by which the problems of an enterprise relating to policies, procedures, operations and administration can efficiently be solved. Authority, and respon­sibility for operating or routine decisions can be delegated closer to the operating levels. Uploader Agreement. 3. Abstract. It means that due importance is given to each department according to its contribution towards the achievement of the objectives. job rotation, job enlarge­ment, delegation, etc. MBA courses generally include managerial accounting, finance, economics, statistics, marketing strategy, information technology and legal issues in business. The principles of organizational structure are an important part of an online Master of Business Administration (MBA) degree program. Thus, a sound organisation structure is the soul of the enterprise. Better Human Relations and a Few Others. Different types are better for different types of workplaces, different corporate philosophies, and different type of companies.When starting a business, one of the first things you need to do is decide on the type of organizational culture that you use to mak… Organizational boundaries often create new barriers to the free flow of information, materials and decisions. It will help supervisor to evaluate the skills of employees easily. v. Sound organisation provides for optimum use of technological improvement. It develops voluntary co-operation and best motivation of employees. For example, a manager can report directly to the president instead of a director, and her assistants are only two levels below the president. Balance should be maintained in authority and responsibility through organisation structure. Thus to achieve these benefits an organisational structure should be designed well with care. Small companies usually use a flat organizational structure. Ensure growth – A well-defined organisation structure will help an enterprise to grow and expand its operations. It lays the basis for other managerial functions such as planning, direction, co-ordination and control. It comprises people and it is the agency through which management performs the important functions of direction, co-ordination and control. vi. It is an important means of bringing co­ordination among the various departments of the enterprise. The importance of sound organisational structure can hardly be over emphasized. The aim of this work is to examine the importance of organizational structure in effective management of general cotton mill Onitsha on issue affecting the management and employees. Efficient organisation offers the following benefits: 1. It permits management to res­pond in time to the changes in the environmental influences and make necessary adjustment to satisfy the new demands of society. Ensures Co-Operation among Workers 12. Helps in effective communication: Such organizational structures help in making the communication system in the company very fine and smooth. Prevents the Growth of Secret, Influence and Corruption: 4. It is not simple organising function of management, it is more than that. As Lounsburry Fish points out-“Organisation is more than a chart, it is the mechanism through which management directly co-ordinates and controls the business. vi. In other words, the value of each individual’s contribution is enhanced and at the same time the accomplishments of the group are increased. Good organisation removes red-tapism and corruption, prevents duplications of work, makes communication easier, and provides a sound basis for workers participation in the management. Sound organisation is an essential prerequisite of efficient management. A sound organisational provides training to new staff members before placement and give refresher training to the existing staff members to improve their efficiency. It thus ensures the optimum use of staff. Organizational structure is particularly important for decision making. The formalized organizational chart was been formed since 1854, by Daniel McCallum, who used organization structure … No matter how much people are responsible and take the responsibility of their jobs, still they need somebody to control their actions and to direct their actions towards a pre-decided goal.. Having a management team in the organization creates a simplified work structure in the organization where workflow from the upper level to the lower level. The main intention of its to have sound management to take out economic efficiency in an organization. Democratic and participative leadership offers satisfaction of higher level wants of employ­ees. 2. The following are the importance of organisational structure: 1. vii. 10. resource­fulness, independent thinking, initiative, spirit of innovation, etc. Clear definition of authority, responsibility relationship facilities better understanding of the objectives and the policies of the enterprise. 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