Organizational Structure and Design

Organizational structure is the process of building a team of highly talented, professional, ambitious and enthusiastic individuals to achieve our set goals and targets. Effective employee management and business expansion are the main reasons for the necessity of a systematic organizational structure and design. You may face countless difficulties while starting your dream organization. The scope of the word 'organization' is very wide. An organization can be a company, a business or even a school or a college. A small business will require a simple organizational structure, while large multinational companies or universities with several colleges under its control would need a large or complex organizational structure. Whether small or large, the first step in forming an organization is to set up a management team which will supervise the working of the entire organization. The management team includes the chairman/promoter of the organization, board of directors and non executive chairman. The mission and the vision of the organization should be defined by the management. Be aware of the types of organizational structures to increase your chances of success.

Explanation of Simple Organizational Structure

A primary school or a start-up private limited company is a good example of a simple organizational structure. Apart from the management, these organizations have fewer employees as compared to the big organizations. The main advantage of a simple organizational structure is the simplicity in caring out the day to day activities. In a primary school, the school head can personally take care of every student's needs due to less number of students. The boss of a small firm can solve his employee's problems immediately and can personally interact with him for performance related issues. Like large organizations, small companies also have marketing department, personnel department, legal advisors and accounts department. Generally, small organizations have few branches and less annual turnover than the large ones. The ultimate power is with the head, who has the final say on any matter related to the company.

How to Design a Good Organizational Structure?

Designing organizational structure needs extra-ordinary management skills, dedication and perseverance. The first step in designing organizational structure involves explaining each and every employee, what his role will be. Employees will not be able to deliver their best, unless they are completely aware of their work and expectations. Another important thing is a system of accurate evaluation of the employee performance without being partial or unjust to any employee. Favoring some employee over the other without authentic reasons can be detrimental for the company's future. There should not be concentration of power in the hands of a few executives, as this may lead to grouping and reduced quality output. Decide the number of employees needed in a particular department and recruit only those many employees. Recruiting excess number of employees can affect the financial position of the company in a negative way while recruiting less staff may cause delay in the production and marketing tasks, thus causing loss of revenue.

Satisfying the needs of the employees is of prime importance as this retains the faith of the employees on the employers. The basic idea is to promote people with good leadership skills. Presence of employee grievance cell under the supervision of the human resource department can assure the employees of their security in terms of payment and position in the company. The rules and regulations set by the management should be followed by all the employees of all the departments. However, the departmental heads should have the freedom of taking certain decisions on their own and interference of people who are in no way connected to a particular decision making process should be strictly prohibited. All departments like marketing, human resource management, accounts and finance, research and development should have independent directors, followed by assistant directors and general managers. Regional managers should be appointed for managing the affairs of a particular territory. As per the descending order, regional managers are followed by branch managers, clerks and assistant clerks.

Transparency in promotions is the highlight of a good organizational structure and design. Promotions and increments should be made strictly on the basis of merit to keep the employee faith in the organization alive. Following the above suggestions might help your dream of becoming a successful entrepreneur come true.