ORGANISATIONAL STRUCTURE AND ITS BENEFITS TO BUSINESSES
ORGANISATIONAL STRUCTURE AND ITS BENEFITS TO BUSINESSES
Source: Investopedia
Introduction
An organisational structure is fundamental for every organisation. It’s shaping the organisation culture and plays a crucial role in sustaining & success of the organisation. A well implemented structure defines how the organisation's activities are organised, directed, coordinated, responsibilities and reporting relationships. The objective is this analysis to understand the importance of a well-defined organisation structure and its benefits to the modern business.
What is organisational structure?
According to the Univercity of Kansas an organisational structure is a framework that defines how a group is organised and supported, ensuring the coalition functioning effectively. It is an operation manual that tells members in the organisation that how the entity is put together and how it works. Further describes how members are accepted, leadership is chosen, decisions are made and how the organisation can meet its objectives and goals.
Source: Youtube.com
Types of Organisational Structures
There are seven types of organizational structures can be identified (Kenton 2024).
1. 1. Functional Organisational Structures
This is simplest and most common structure.
According to this structure, divides the organisation based on the specific
task or specialisation of its workforce (Kenton 2024).
Figure 1: Functional Structure
Source: www.killerinsideme.com
2. 2. Divisional Organisational Structure
In this structure, organisation divides departments
according to what sells or where it operates. This each department operating
independently (Khan 2024)
Figure 2: Divisional Structure
Source: AIHR
3. 3. Matrix Organisation Structure
This is a hybrid type structure where the employees
report to multiple supervisors or leaders. This structure commonly uses for
project management that need the expertise and skills of employees from various
departments (Khan 2024).
Figure 3: Matrix Structure
Source: www.functionly.com
4. 4. Flat organisational Structure
A flat structure has few or no levels of middle management between employees (Khan 2024). There are minimal job titles or employees.
Figure 4: Flat Structure
Source: https://edrawmind.wondershare.com
5. 5. Hierarchical Organizational Structure
This is a pyramid shaped structure where follows
a direct chain of command from top to bottom through the organisational chart
(Sati and Stefou 2020)
Figure 5: Hierarchical Structure
6. 6. Team Based Organisational Structure
In this structure, priorities teams as the
core unit for archiving organisational goals (University of Southern California,
2023)
Figure 6: Team Based Structure
Source: https://utpaqp.edu.pe
7. 7. Network Organisation Structure
This operates as a network of business units.
Within the network employees are connected through a series of relationships
(AIHR).
Figure 6: Network Structure
Source: AIHR
Benefits of well-defined organisational structure
According to Miller (2021), a well-defined organisational structure
will help an organisation to perform their day-to-day functions at an optimal
level between employees and departments. Following are the key benefits can
gain on a strong structure.
- Give clarity to employees about their job role
- Efficient decision making
- Provide organised and calm working environment
- Increase productivity
- Encourage employees to take responsibility for their job role
- Increase client satisfaction
Conclusion
Every organization essential a strong and well-defined
organizational structure based on its industry, size and activities for the success and growth of the organisation. It enhances
communication and responsibilities, provides clarity in employees job role, and boosts productivity. Further it smoothes decision making process and enhance resource
management efficiency. Leading business in Sri Lanka such as MAS, DIALOG, UNILEVER
and HEMAS have the strong and well-defined organizational structures and long term success of these companies have based on their organisational structure. When carefully analysing the Sri
Lankan organisations, above mentioned each of structures can be identified.
References
University of Kansas, Developing a Strategic Plan and
Organizational Structure, Chapter 9, Section 1 [Online]. Available at https://ctb.ku.edu/en/table-of-contents/structure/organizational-structure/overview/main.
[Accessed on 13th March 2025]
Kenton, W. (2024) Organizational Structure for Companies with
Examples and Benefits [Online]. Available at https://www.investopedia.com/terms/o/organizational-structure.asp.
[Accessed on 13th March 2025]
Khan, R. (2024) 7 Types of Organizational Structures [Online].
Available at https://www.allnewbusiness.com/organizational-structures/?utm_source=chatgpt.com.
[Accessed on 13th March 2025]
Indeed (2025) Hierarchical Structures: Definition, How it
Works and Examples [Online]. Available at https://uk.indeed.com/career-advice/career-development/hierarchical-structure.
[Accessed on 13th March 2025]
University of Southern California, 2023 Team-Based
Structures: Examples From the Best Companies in History [Online]. Available at https://communicationmgmt.usc.edu/blog/team-based-structures.
[Accessed on 13th March 2025]
AIHR, Network Organization [Online]. Available at https://www.aihr.com/hr-glossary/network-organization/.
[Accessed on 13th March 2025]
Sati, A. and Stefou, T. (2020) Hierarchical Organizational
Structure and Leadership [Online]. Available at https://oxfordre.com/education/education/abstract/10.1093/acrefore/9780190264093.001.0001/acrefore-9780190264093-e-709.
[Accessed on 13th March 2025]
Miller, V. (2021) Organisational Structures [Online].
Available at https://cpdonline.co.uk/knowledge-base/business/organisational-structures.
[Accessed on 13th March 2025]
A hierarchical organizational structure provides clear lines of authority and accountability, making it easier to manage large teams and complex operations. While it ensures clear decision-making, it can sometimes slow down innovation and flexibility. Finding the right balance between structure and adaptability is key to maintaining efficiency in today’s dynamic business environment!
ReplyDeleteOrganizational structure is the backbone of any company, and this article does an excellent job explaining the various types and their benefits. I like the focus on clarity in roles, which can significantly improve communication and decision-making. A well-structured organization leads to better productivity and job satisfaction. It's interesting to see how companies like MAS and Unilever are examples of successful implementation, proving how crucial the right structure is for long-term success.
ReplyDeleteIn organized workplaces, it is important to prioritize how employees are structured, and human resources should work in a clear and fair way. This openness helps create strong support and improves communication among everyone involved. By working together, we can reduce problems and encourage sustainable growth in the organization. It is inspiring to see how these practices help build a positive and successful workplace culture.
ReplyDeleteThere are many benefits In a network organisation , but roles and responsibilities can sometimes be unclear. Employees may not know who is responsible for specific tasks, leading to confusion and potential overlaps in duties.
ReplyDeleteThe article does a great job of explaining how a company's structure affects its success. It describes different setups like functional, divisional, matrix, flat, hierarchical, team-based, and network structures. Human Resource Management (HRM) is key in shaping and maintaining these structures. HRM helps assign roles, sets up teams, and ensures everyone knows their responsibilities, leading to better communication and productivity. I agreed with your conclusion that a clear organizational structure is vital for a company's success.
ReplyDeleteHaving a rigid organisational structure is an important factor for a organisation to get their works effectively. Team based structure is the most of companies adapting since its the most effective in sri lankan context
ReplyDeleteGreate discussion.an effective organizational structure is foundation for business success.providing clarity,improving communication,enhancing decision making and promoting employee satisfaction .
ReplyDeleteOrganizational structure plays a key role in streamlining operations and improving business efficiency. Different structures offer various advantages, such as clear roles and better decision-making, which can significantly enhance business performance
ReplyDeleteThis comment has been removed by the author.
ReplyDeleteAn effective organizational structure provides clarity, improves communication, and enhances efficiency within a business. By clearly defining roles and responsibilities, it helps streamline decision-making, fosters collaboration, and aligns teams with the company’s strategic goals, driving overall growth and success.
ReplyDeleteAn organizational structure plays a crucial role in helping an organization achieve its goals and objectives by defining roles, responsibilities, and lines of communication. A well-designed structure enables effective decision-making, enhances collaboration, and fosters a sense of accountability among employees, ultimately driving success. By establishing a clear hierarchy and allocating resources efficiently, an organizational structure helps to streamline operations, improve productivity, and increase overall organizational success.
ReplyDeleteThis article explains the importance of having a well-defined organizational structure and how it helps businesses run more efficiently. It shows that a clear structure improves communication, boosts productivity, and ensures roles and responsibilities are well understood, ultimately contributing to a company's success.
ReplyDeleteA well-defined organizational structure is significant for the success and growth of any organization. It provides simplicity in roles, responsibilities, and communication channels, enabling efficient decision-making and coordination.
ReplyDelete