The term organizational structure reveals an established pattern of relationships among the constituent parts of the organization. It prescribes the relationships among various activities and various positions in an organization. It is nothing but a chart of relationships.
Organization structure refers to a system where the work is divided formally. These smaller tasks are gathered and synchronized in order to promote coordination in the organization. It refers to an outline group, individuals, operations systems and job putting efforts to attain stipulated goals. It is the arrangement of jobs that is formally defined. According to Mintzberg (1972), "organizational structure is the framework of relations on jobs, systems, operating process, people and groups making efforts to achieve the goals. Organizational structure is a set of methods dividing the tasks to determining duties and coordinates them."
According to Hold and Antony (1991), "Structure is not a coordination mechanism and it affects all organizational process. Organizational structure refers to the models of internal relations of organization, powe5r and relations and reporting, formal communication channels, responsibility and decision-making delegation is clarified."
Importance of Organisational Structure:
Organizational structure is a mechanism through which management directs, coordinates and controls the business.
- Facilitates the management process and overall operations of the organization and provides better coordination.
- Encourages growth by increasing efficiency and give clarity about roles and responsibilities.
- Builds relationships across various managerial levels and encourages human beings to attain psychological satisfaction from their work, their position and their working environment.
- Defines organizational relationships and stimulates creativity in the organization by initiating new and improved ways of work processes.
Features of Good Organisational Structure:
Continuity and Flexibility: Organisational structure should not be rigid and be able to accommodate future requirements also.
Ultimate Authority: The superior is responsible for the performance of his work along with the work of his subordinates.
Tesser Managerial Levels: The more management levels, the longer the delay in communication.
Link Between: The board of directors, shareholders and the management team should be there. This is because the board of directors seldom meets management, hence the organisational structure helps in defining how top-level management and BoD will interact.
Unity of Direction: The organization structure must focus that each subordinate and member focus on one common goal.
Common Goals: Organisational structure ensures the smooth achievement of goals.
Cooperative Efforts: The proper coordination and mutual cooperation among various subsystems in an organization.
Simplicity: Organisational relations should be kept simple and minimum possible with clearly defined roles, powers and responsibilities.
Division of Work: It ensures the execution of work.
Communication: It mainly downward communication takes place in the form of superiors issuing commands, orders, directives etc.
Clear Line of Authority: Running from top to bottom or sometimes in horizontal directions.