Necessity of A Good Organizational Structure in A Company
Reading Time: 3 minutes Not every fresh company thinks that organizational structure is really all that important. In fact, a lot of them believe that the fact that they have got about twenty workers who know what they are supposed to do makes such a structure redundant.
However, the fact is that a corporate structure is crucial to how your business communicates, assigns responsibilities, and adapts to whatever comes its way. It makes it possible for you to make sure that your vision and human capital are on the same page. Furthermore, it makes your organization a lot more transparent, enabling you to clearly see how each and every employee is making a contribution, as well as how teams are cooperating.
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The Significance of an Organizational Structure
The fact is that if you don’t have a formally outlined organizational structure, your staff will not know who exactly they are supposed to report to in different situations. Furthermore, it will be a question on whose shoulders the final responsibility for certain tasks falls upon. By implementing a structure, you are making the cooperation and communication between different levels much clearer. This way, your business is certainly going to be much more efficient.
When all of your departments are aware of a particular organizational structure, they will be able to focus and be more effective when it comes to their tasks and know who they need to communicate with if a problem should arise. What is also useful is the fact that via a structured business you will be able to outline exact advancement tracks for new workers and promote them when necessary.
Defining the Roles
One of the biggest reasons why an organizational structure is important is because it helps you define the necessary roles for everyone and write specific job descriptions accordingly. This is where you will outline the responsibilities and duties of a person that wants to work in your company, as well as what the minimum requirements are for them to apply for a position.
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However, when it comes to startups, it is most often the best not to strictly name and define these positions right away. You want to take a proactive approach so that when coming up with an organizational structure, you will be able to determine in advance what positions your company is going to require in the future.
Mapping out the Work
So, as we have ascertained, an organizational structure is all about mapping out how the work is supposed to be done, defining the processes that are necessary for your company to be as efficient as possible, and outlining the information sharing process. This way you can departmentalize your company and make sure that each unit has its own role.
Let’s say that you want to have specific departments for development, design, marketing, and customer service. Here you will certainly want to make sure that the exchange of information between the units is properly defined. Your development and design departments are surely going to need a clear and direct means of communication.
Also, as your business expands, you will have workers in cross-functional teams and supervised by more than one manager. By having an organization, they will know exactly what information needs to be reported to whom.
Other Benefits of an Organizational Structure
When you’ve got a properly organized business, you are striving towards success, expansion, and greater profit. An organizational structure enables you to determine what kind of talent your business needs. It helps you generate a framework according to which you are going to compensate for every job position, and makes it possible for your best-performing workers to have enough room to grow.
Furthermore, it aids you in determining whether you are really capable to accomplish the goals that you have set out as a company. Finally, should an insolvency happen, you will have a clear view of asset protection and exposure, which is, according to an expert on the matter, Dean Willcocks, something that people tend to neglect.
In Summation
An organizational structure is extremely important in terms of departmentalizing your company, defining employees’ roles, and making sure that they have a clear communication path. In an organized company, everyone knows what they are supposed to do and whom they should report to. Having a structure is all about preparing and striving for an efficient business and a profitable future.
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