- Parent Category: Small Business
- Created on Thursday, 08 December 2011 05:10
- Published Date
Every organisation has a specific composition or hierarchy which gives employees a sense of identity and helps them understand their position and purpose in the broader context of the business. Here are some guidelines to establishing organisational structure.
Whether it’s a public or private business, small company or large corporation “employees need to know who’s in charge, what their role is and who to turn to if there are any problems.” There is no ‘one-size fits all’ model and organisational structures will differ across sectors and regions. “Size, culture, activity and history” are the four primary factors that determine the type of organisational structure that would best suit the business.
The educational video addresses these four basic building blocks of organisational structure.
A large corporation consists of branches and divisions which may even span oceans or continents. Hierarchies are established within these separate divisions while simultaneously being incorporated into the structure of the organisation as a whole. This means that the senior manager in one region may not be regarded as the senior manager overall.
This is further defined by the type governance practiced in the organisation. For example, an “autocratic business” will have a taller structure; while a “democratic business” will lean towards a more compressed structure.
“The nature of the business will influence the structure”. In companies where creativity is fundamental to success, a flatter structure is preferable. In flat structures employees view themselves as equals which leads to greater interaction and as a result staff are more likely to share ideas.
Organisational structures may change as the business grows and expands. Look at positions that have played an important role throughout the evolution of the business as a guideline when restructuring. Are traditional hierarchical structures still relevant in the business environment? Find the answer to this and other related questions in the Organisational structure video.
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