Organisational Structure

• Organisational Structure refers to the way in which a business is organised internally and it is crucial to understand because it determines the role and responsibilities of the employees.

• Hierarchical Structure: This is a traditional organisational structure where authority flows from top to bottom. It is often used by large, complex businesses. Those at the top have the most power and responsibility and information flows down through various levels of management.

• Flat Structure: This type of organisation has fewer management levels and promotes a more inclusive approach. Communication can be more efficient and decision-making quicker, often found in newer or smaller enterprises.

• Centralised Structure involves decisions made at the highest level and executed down the line. This ensures consistency but may lack flexibility and slow decision making.

• Decentralised Structure on the other hand, empowers lower-level employees or teams to make decisions. This can lead to faster responses and more innovation, but may risk inconsistency across the organisation.

• Matrix Structure: This is a blend of hierarchical and flat structures. It involves employees from different areas of the business working together on specific projects. It encourages information sharing and collaboration but can create confusion in terms of reporting relationships.

• The structure chosen can reflect the Business Culture, whether it is power-oriented, role-oriented, task-oriented, or people-oriented, can affect the choice of organisational structure.

• The Span of Control refers to the number of people a manager directly oversees. A wide span means fewer levels of hierarchy but may stretch a manager’s capability. A narrow span means more levels of hierarchy but could allow for more focused management.

• Organisational Structures should be influenced by business objectives. They should work to support the achievement of these by aligning roles, responsibilities and lines of communication effectively.

• The structure will also heavily impact the communication within the company. Effective communication is vital for understanding and executing strategy, sharing information and maintaining morale among employees.

• Changing an Organisational Structure can be disruptive but necessary for growth, adaptation to market changes or improved efficiency. It requires careful planning and communication to successfully implement.

• Understanding Organizational Structures is critical for managing people effectively within a business context. It influences many functions such as recruitment, reward systems, team dynamics, performance management and employee satisfaction.