Processes and structures are becoming more and more complex today, so transparency and, consequently, the efficiency of the systems are often lost. For this reason, the development and optimization of processes and structures is a constant challenge. Today's organizational systems require goal-oriented planning and structuring of company-specific processes and meaningful content management. In complex organizational systems, the processes and structures can make decisions, which plays an essential role in the long term. Effective business processes and structures are central to the functioning of the organization.
The complexity of today's business world translates into the complexity of the company's organizational design. Organizations are forced to move quickly to adapt to the emerging complexity to survive. Today, the essence of organizations is primarily represented by people, not as individuals, but rather as a connected whole that creates value for customers. Defining organizational processes and structures can help create the logistical conditions and social relations to support joint action for change. That clarity and formality help create a stable structure and operational procedures for strategic performance.
A well-thought-out and strategic business configuration explains reporting relationships and supports good communication, resulting in an efficient and successful workflow. Therefore, every organization must operate with a defined organizational structure. Organizational structures deal with recurring relationships between organizational members. Some of these structures are written formally in organizational charts and other procedures. Many of them are informal, even if they are often closely related to formal structures. Therefore, organizational structures are vital to achieving anything in an organization and are essential to implementing strategies.
The organizational structure gives the company a visual representation of how it is structured and how it can best progress in achieving its goals. Organizational structures are usually represented in some kind of diagram, such as a pyramid, with the most powerful members of the organization at the top and those with the least power at the bottom. They determine the rules, roles, and responsibilities for performing certain activities, as well as the flow of information between levels within the organization. For example, in a centralized structure, decisions flow from the top down, while in a decentralized structure, decision-making authority is distributed among different levels of the organization.
Establishing an organizational structure for companies allows them to remain efficient and focused. If organizations understand how common types of organizational structures are implemented, how they support the organizations, and what challenges and benefits they bring. Then they can decide which one is right for their particular organization and set about achieving their goals for greater efficiency, competitiveness, and profitability.
The four main or most common organizational structures are:
- Functional or Hierarchical organizational structure
- Divisional organizational structure
- Matrix organizational structure
- Flat or Horizontal organizational structure
In addition to the organizational structures listed and described above, there are also the following types of organizational structures:
- project organizational structure,
- AD HOC organization,
- an organizational structure focused on customer wants and needs,
- hybrid organizational structure,
- circular organizational structure,
- network organizational structure
- process-oriented organizational structure that was formed based on external influences on the organization over time.
Key elements of organizational structure include how certain activities are directed to achieve the organizational goals, such as rules, roles, responsibilities and the flow of information between levels in the company. The structure also makes operations more efficient. By separating employees and functions into different departments, the company can smoothly carry out different operations simultaneously. Establishing an organizational structure can be very useful for businesses. The structure not only defines the hierarchy of the company but also allows the company to set up a salary structure for employees. By establishing an organizational structure, a company can determine pay grades and ranges for each position. There is no best organizational structure, as it depends on the nature of the company and the industry in which it operates.
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