A major factor that impacts organizational structure is company growth. As a company grows, the impact on the structure of the organization is significant. This can be especially true when the organization begins to expand to other geographic regions and the structure of the organization is spread out over many miles. A company may start out small, but, as time goes by, more employees may be hired, necessitating the introduction of departmental managers to help create a managerial structure. Additionally, an executive team may be required to run the various aspects of the business, and there may be the need for middle managers who would report to the managers.
Customer service is important in business, so many companies have created entire divisions dedicated to customer service and retention. If a particular customer awards a large contract to your company, you may need to rearrange certain parts of your organization to accommodate the contract. For example, there may need to be an entire sales division created just for that customer and manufacturing may need to create a sub-process to build specialized products as well. As the needs of your customers shift, so to will the structure of your organization
Technology can have an impact on how your organization is structured and how work flows. The Reference for Business points out that when computer networks became popular, it became easier for people to work as groups. People did not need to be in the same room, or even the same building, to be efficient. Technology can create positions within your company and it can eliminate positions. When filing is done electronically, there is no longer a need for as many file clerks as you once had but there is a need for a department of technicians to maintain and grow the computer network. As technology continues to change the function of jobs in the workplace, the landscape of organizational structure changes with it.
Organizational Structure & Effectiveness by Rick Suttle, Demand Media
A functional organizational structure may be most effective for your business.
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A company can start out by using one of several organizational structures. However, companies can sometimes increase their effectiveness using multiple organizational structures. Other companies may switch from one type of organizational structure to another to be more effective. The decision for organizational structure usually lies with top management. The size of a company is sometimes the determining factor as to organizational structure effectiveness.
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Larger companies often benefit from a taller organizational structure. A tall organizational structure contains lots of management levels. Decision makers dole out tasks and projects in which they hold subordinates accountable. Upper management knows what strategies the wish to implement and, subsequently, get all subordinates working together to effectively meet company goals. Contrarily, small companies will…