Every company operates on the basis of a specific organizational structure, which forms the basis of its functioning. Choosing the right one is crucial for achieving the company’s goals.
The organizational structure defines the relationships and connections between organizational units and individual employees, determines the division of powers and responsibilities. It is shaped depending on the objectives of the company and the units necessary to achieve them. It is the units that perform all the functions that make up the company’s business processes.
Elements of organizational structure
The organizational structure of any organization will depend on how far it has grown, who its members are and what tasks they perform. The organizational structure is shaped by factors such as:
- the legal form of the business;
- the type of business;
- the scale of the business and the size of the products produced;
- the strategies and technologies used;
- the ways in which goods and services are sold;
- the amount of capital, available resources, etc.
No matter what organizational structure we choose, certain elements will always be present in it: management (except for self-managing teams, about which read here), i.e. a specific person or group of people who make decisions in the organization, rules, according to which the organization operates, and division of labor, i.e. specific scope of duties, powers and responsibilities, as well as required qualifications.
The most common types of organizational structures
Line structure – the simplest of all existing varieties of business management structures. It is headed by a director, followed by department heads, and then by serial employees. This means that everything in the organization is vertically connected.
Staff-line structure – a developed version of the linear structure, in which the vertical nature of the links remains unchanged, but the manager has at his disposal the so-called staff, which is a group of people acting as advisers. The staff does not have the authority to issue orders to contractors, but has a strong influence on the supervisor
Functional structure – introduces a division into functional departments headed by specialists. However, there is a risk: in this structure the functions of managers sometimes overlap and when a problem arises it is difficult to determine whose fault it is.
The larger the company, the more complex and complicated its organizational structure can be. Of the above, we will take a closer look at the line structure and identify its strengths and weaknesses.
Advantages and disadvantages of a linear structure
A linear structure will work best for smaller businesses and at the very beginning of a company’s operations. Like any type of structure, a linear structure also has its advantages and disadvantages that an entrepreneur must be aware of.
Among the advantages of a line structure, experts most often include:
- clear division of authority, competencies and responsibilities;
- employees are accountable to one person – the manager;
- possibility of quick interaction between employees and management;
- maximum speed of execution of orders;
- easiness of controlling the actions of subordinate personnel, possibility of immediate correction of possible mistakes;
- each employee or department is responsible for one issue;
- personal responsibility of the employee motivates him to perform tasks in a qualitative and professional manner.
Among the disadvantages of the line structure, it is primarily indicated:
- lack of specialization, which requires the top level to deal with all functions in the organization;
- many intermediate management links that prevent the employee from quickly contacting and getting answers from top management;
- high workload on senior and middle managers;
- low flexibility and adaptability to new or crisis situations;
- thedependence of the company on the decisions of a single individual.
A linear organizational structure is therefore simple, easy to understand and transparent to all its participants. Clearly defined rights and responsibilities of all managers and employees create conditions for quick decision-making. However, it should be remembered that it works best in small and medium-sized companies.
Main article photo: photo by Vlada Karpovich, source: pexels.com