Organizational Structure-its importance and types

Organizational structure refers to the framework in which job positions are linked and make a network of authority and responsibilities at various levels. It clearly defines the levels of the organization and shows the working style of the organization.

Organization means to arrange and structure tells about the arrangement of all the activities. On the other hand, the organizational structure defined as a systematic establishment that ensures the levels and hierarchy which is used by the people of the organization at the time of performing their tasks.

"The span of management" 

The span of management tells bout the effective management/control over numbers of employees by one boss. It is also known as the span of control. The span of control establishes the hierarchy(scaler chain) which clearly specifies that who has to report to whom. The subordinate must follow the orders from one boss and should be accountable for one superior only. 

Importance of organizational structure:

Doing work in a systematic way represents the effective results that are possible through a good organizational structure. There are some important points that enhancing its importance :

1. The appropriate structure ensures a better flow of communication.
2. The structure describes the levels of the organization and span of control.
3. Organizational structure specifies the relationship between the people of the organization.
4. It also builds coordination among all the departments of the organization.
5. The structure clearly defines the responsibility of each department.

Types of organizational structure:

The organizational structure is mainly categorized into two parts:

1. Functional Structure:

This structure emphasis on specific functions. In this, activities are grouped according to the specialized work. For example, Jobs related to the production of goods categorized in the production department, jobs related to information technology grouped into IT department/computer department, etc.

let's take another example of the production department which is further divided into sub-units according to the specialization-assembly department, quality control department, store department each department is under the control of one supervisor who manages the work all time.

Suitability:

The functional structure improves the efficiency of employees to do similar jobs. It is suitable for:

1. Grouping similar nature activities.
2. One product manufacturing company.
3. Where work is divided according to the functions and their specialization.

Divisional structure:

Divisional structure refers to forming a partition/splitting/subdivision. Where the business units producing more than one product with specialization. It is applicable to large-scale organizations. 

For example- One multiproduct manufacturing unit subdivided its activities related to production according to specialization. like; production of medicine, cosmetics, etc. then all the activities related to medicine will be further subdivided into ayurvedic, allopathic, homeopathic, etc.)under the medicine department, cosmetics will be further subdivided into perfume making, kajal, nail paint, lotion, etc.

Suitability:

1. A divisional structure is suitable for multiproduct business units.
2. A divisional structure is suitable which requires product specialization.
3. Suitable for those companies which are planing for more line of products in future.

Thanks for reading the topic.