Inadequate organisation may not only discourage but also actually preclude effective administration”. v. It is more than a chart—it is the best mechanism for mana­gerial leadership, co-ordination and control. Account Disable 12. It facilitates in introducing changes in the enterprise by modifying the authority and responsibility relationship in the wake of new developments. Activities that should be integrated or centralized are spread out and put to improper supervision. This ensures that each person and department will contribute to his best capacity and skill, will feel definite and specific responsibility, will avoid duplications and overlaps and will improve the efficiency and speed of work. The organisation should be flexible to incorporate all new requirements. Before uploading and sharing your knowledge on this site, please read the following pages: 1. It also provides for efficient methods of selection, training and promotion of employees, further not as machines. Organisational structure lays down both channels and the patterns of communication. the most important issues facing organizational research- ers. Organizational structure is the chain of hierarchy, which divides entire employees of an organization based on their level, roles, and responsibilities. It provides for the optimum use of technological improvement, e.g. Organisation is an important way of achieving coordination among different departments of an enterprise. Thus to achieve these benefits an organisational structure should be designed well with care. Well-designed and balanced organisation facilitates management and operations of the enterprise. 20. According to Allen, “A sound organisation can contribute greatly to the continuity and success of the enterprise”. 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. Importance of Organization Structure. 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. Management, Functions, Organisational Structure. A one man business, will have no difficulty about coordinating the efforts of the buying, selling and other management functions of the business. The new entrants get sufficient training in their work. A well-structured organisation also encourages co-ordination and co-operations amongst all the individuals in the organisation. Prohibited Content 3. There is, in fact, no one type of organizational culture that is better than another. Ensures Optimum Utilisation of Material Resources and Human Efforts: 6. Clear-cut accountability provides re­cognition for the specialist and the professional in terms of their achievement. Designing an organization structure … Everybody will know his limitations and may try to remain in that sphere. Co-operation – A sound organisation ensures proper co­operation amongst its employees. An organisation provides sound foundation for effective managerial control. Departments/units are formed on the basis of requirements of the enterprise. The organisation can undertake more activities without dislocation. This is referred to as the division of work. Now-a-days training institutes give training to the needy persons with the help of the different experts from various fields. 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… Coordination includes control systems, decision-making systems and information systems. Prohibited Content 3. Ernest Dale’s description of organising consists five-step process provides a good framework for the discussion of organisational structure. The organization responds more quickly and efficiently to market needs, and focuses efforts solely on the objectives of each business un… The structure of the company depends upon the structure of the organisation. (iii) Combine task in a logical and efficient manner. Sound organisation alone assures accomplishment of objectives and strategies as per predeter­mined plans and policies. Management, Organisation, Organisational Structure. A flat organization is one where there are fewer layers of management, making communication to the top of the organization quicker. Sound organisation (as a founda­tion for management process) can provide following typical results: i. An organization is basically a group of people who collectively work to achieve common goals.Division of responsibilities under a ranking system is the backbone of any organization. Plagiarism Prevention 5. This can be done through proper training and development programmes. Types of Organizational Structures An organizational structure defines how jobs and tasks are formally divided, grouped and coordinated. The activities of different departments are grouped together to achieve the business objectives. A sound organisation by providing for training of staff at different levels and by proper delegation and decentralization helps development of managers. Most companies either have a tall or flat organizational structure. Report a Violation 11. The adjustment to new changes will require re-scheduling and re-adjustment of duties and responsibilities in the organisation. Aid to Management 9. It creates an environment where people can work effectively. It facilitates administration by avoiding waste motions, overlap in work and duplication of effort. It can secure the optimum use of human efforts through specialisation. According to Dictionary-Organizational behavioral [19], organizational structure is defined as “the estab- lished pattern of relationships among the components of parts of company (The way a company is set-up). “A well-defined and sound organisation makes sure that there is proper co-ordination between all the activities. If persons are not encouraged to take new initiative then the management may not be able to cope with the changing business environment. Better Human Relations and a Few Others. Organizational boundaries often create new barriers to the free flow of information, materials and decisions. Small companies usually use a flat organizational structure. Simplified organizational structure. Promotes Growth and Diversification 3. Thus, it facilitates human use of human beings. Content Filtration 6. A sound organisation structure encourages better relations between the worker and the management, and increases employee satisfaction and decreases employee turnover. The Importance of Organizational Structure in Effective Management. After reading this article you will learn about Organisational Structure:- 1. Persons are allowed to try new ideas for improving upon their work. There’s an executive at the top of the heap, people responsible for each area (the director tier is for bigger businesses), and teams of people who do the work in each department.The advantage of this type of organizational structure lies in its simplicity. A good organisation helps in encouraging people to try new ideas. With the help of a well-defined organisation management is able to perform the functions of direction, co-ordination and control. 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. The importance of sound organisational structure can hardly be over emphasized. Every organization has a structure which defines the hierarchy, the distribution of roles or the responsibilities within the organization. iv. rise in the level of mutual trust, support, openness and completeness of communication, widespread participation in planning and decision making. Thus, the organisation climate is intangible. The organizational structure of HR needs to be flat as possible. viii. In short, existence of a good organization structure is essential for better management. Clear definition of authority, responsibility relationship facilities better understanding of the objectives and the policies of the enterprise. It gives them job satisfaction too. A clearly defined authority provides a scope for the use of talent. 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. Before uploading and sharing your knowledge on this site, please read the following pages: 1. The top level executives perform the functions, like planning, organising, staffing, directing, controlling the lower level people. Duplication of work, wrong planning, inefficient personal, lack of motivation, improper allocation of duties and responsibilities, absence of co-ordination, communication gap, and improper instructions are the ingredients of ineffective administration. 2. 3. In India, Corporate governance is set on policy, internal controls and procedures which form the plan of dealing stakeholders and company operations such as management, employees, customers, industry bodies and government. Sound organization structure can contribute greatly to the survival continuity and stability of the enterprise. Huge Collection of Essays, Research Papers and Articles on Business Management shared by visitors and users like you. It ensures closer co-operation and higher employee morale. 16. Sound and well-designed organisa­tion, on the other hand, improves company administration, encourages growth and diversification and tones up overall operations of the company. The function of organizing is required for the performance. Sound organisation helps in keeping the various activities under control and increase the capacity of the enterprise to undertake more activities. Organisational structure means a developed enterprise being operated to achieve the given goals. If an organisation is ill-designed and reveals a number of deficiencies, management is rendered difficult and ineffective. Only through coordination of the different tasks are we able to attain the collective goals. The growth strategy involves expansion thus introducing the element of complexity and uncertainty. Importance # 1. (i) List the work that needs to be done to accomplish organisation goals. All organizational structures have inherent liabilities. The functions like co-ordination and control require a proper division of various functions and their assignment to suitable persons. Jobs are designed to suit human needs. Jobs are made challenging, meaningful and interesting. Organisation classifies the entire business activities into departments. Sound organisation is a must for every enterprise not only for its continuity but also for its success. A good organisation enhances capacity of individuals and enables them to take advantage of the skills and experiences. Organizations need to be efficient, flexible, innovative and caring in order to … 3. The initiative and creativeness encouraged in the organisation will make it dynamic and responsive to the new situations. The grouping of employees and tasks is generally referred to as departmentalization. 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. It is felt by people. The organizational structure also determines how information flows between levels within the company. It eliminates the duplication of command. Human, technical and material resources are put to good use. It will help supervisor to evaluate the skills of employees easily. Everything you need to know about the importance of organisational structure. It also provides for the channels of communication for the co­ordination of the activities of different departments. Another important role of organizational structure is employee performance evaluation. It is therefore very important for an organization to take utmost care while creating the organizational structure. Importance of Organizational Structure and Design : 1. A clearly defined work, authority, responsibility, accountability will enable individuals to work in a free atmosphere. There should be an effective administration to achieve the objectives of the business. Organizational structures. It helps management in performing other management functions such as planning, direction, delegation, control etc. Sound organisation stimulates creative thinking and initiative on the part of employees. R. A. Pitts believes that the structure is highly influenced by strategy. 3, Targoviste COUNTRY Romania,, Abstract The … Good organisation improves interpersonal and intergroup behaviour to secure team work, i.e. It facilitates attainment of the objectives of the enterprise. With these activities the organisation provides a framework within which the company grows. The size of the organisation also affect the organisational structure. In short, sound organisation is humanistic and people-oriented so that we have ample scope for develop­ment of human talents and creativity. Co-ordination – Co-ordination means bringing harmony in the efforts of various individuals. It lays the basis for other managerial functions such as planning, direction, co-ordination and control. 9. (v) Monitor the organisational structure’s effectiveness and make adjustments as needed. Better Relationships – A sound organisation helps in building better relationship amongst its personnel, department, sections etc. An organization is basically a group of people who collectively work to achieve common goals. Therefore, in the end we can say that organisation helps to improve the operations of the business as a whole. Importance of Organizational structure to … 6. #2. By proper division of work, grouping tasks of individual jobs, grouping jobs or people into sections and de­partments, we can adopt consistent delegation and decentrali­sation, when necessary. Image Guidelines 4. Key executives typically decide upon the basic pattern of structure that in their opinion will be most appropriate for themselves, their work, and organisation goals. Sound organisation helps in coordinating various jobs in the department or organisation. Having a strong organizational structure is paramount to the success of any business. Departmentation enables proper planning of work. Facilitates administration: Sound organisation helps in the performance of management functions like planning, staffing, directing and controlling. It is the means by which the problems of an enterprise relating to policies, procedures, operations and administration can efficiently be solved. It offer ample scope for the training and development of managers e.g. Right man, right time and the right job can also be applied to them. Increases management efficiency – Good organisation assures all round efficiency by bringing definiteness all around, matching jobs with individuals and individuals with jobs, by utilising best skills, experience, abilities and specialisation and by avoiding delays and wastages. Importance of Corporate Governance is discussed below; What is Corporate Governance? It promotes effective leadership and thereby ensures good employee morale. It ensures close co-operation and higher employee morale. By providing training and practice on different jobs, and in different capacities, efficient organisation offers excellent scope to its employees for development. vii. In this regard the following factors to be considered in designing an effective organisational structure: It is an important factor affecting the organisational design. It enables smooth management and operation of the enterprise, thereby, enhancing managerial efficiency, e.g. Inadequate organisation may result in duplication of work and efforts and some of the important operations may b… [19], organizational structure is defined as “the estab- lished pattern of relationships among the components of parts of company (The way a company is set-up). 7. Organizational structure is important for any growing company to provide guidance and clarity on specific human resource issues, such as managerial authority. 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. In this way, the organisation maintains the relationship with each other in an enterprise. xiii. 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. It is more than a mere chart—it is the best mecha­nism for management in action, i.e., leadership, motivation, coordination and control. Organizational structure allows the expressed allocation of responsibilities for different functions and processes to different entities such as the branch, department, workgroup, and individual. Structural components of organizational design include goals, strategy, structure and tasks. Abstract. They formally defined framework of an organization’s task and authority relationships”. with clearly defined jobs, authority and responsibility, resulting into reduction in conflicts and chaos in the organisation. It’s a rather complex issue. Stimulates Creativity. (5) It Encourages Human Use of Human Resources: A sound organisation provides for job rotation and job enlargement and makes job meaningful and interesting. It specifies the channel and mode of communication … 8. The effect of exogenous changes in … Organisation structure establishes hierarchy in the organisation; which clearly make an outline of the information flow. Every organization has a structure which defines the hierarchy, the distribution of roles or the responsibilities within the organization. 9. 2. Different jobs and positions are interrelated by structural relationship. Optimum use of resources – A well-defined organisation will lead to optimum use of resources. Organisation is a mechanism which consists of formal organizational structure of role, relationship, position and authority. Helps in Optimum Utilisation of Technological Innovations: The test of a good organisation is its success in adjusting to the new and changing situation. 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