effective communication system, and well knitted relationships bring unity in command and direction, fixed responsibilities and division of work and facilitate control and co-ordination. Importance of Organizational structure to … It is the basis for necessary team work among the various members of a common enterprise and helps in coordinating their efforts. This can be done through proper training and development programmes. Promotes Growth and Diversification 3. Simplified organizational structure. Best plans may fail if these are not executed properly. There is a need for coordinating the working of various segments. ix. Sound organisation has flexibility and also stability. Sound organisation helps in coordinating various jobs in the department or organisation. Essays, Research Papers and Articles on Business Management, Organisational Structure: Functional Structure and Divisional Structure, Organisation Structure: Meaning, Elements and Forms, Types of Organizational Structure | Organization |Management, Importance of Proper Coordination to Achieve Organizational Objectives, Importance of Sound Organisational Structure– Facilitates Administration, Promotes Growth and Diversification, Fosters Co-Ordination and a Few Others, Importance of Sound Organisational Structure– Enlarges Abilities, Facilitates Administration, Facilitates Growth and Diversification and a Few Others, Importance of Sound Organisational Structure – Aid To Management, Facilitates Growth of Enterprise, Stimulates Creativity, Adoption of New Technology and a Few Others, Importance of Sound Organisational Structure – Some Typical Results Provided by a Sound Organisation, Importance of Sound Organisational Structure – Helps in Optimum Utilisation of Technological Innovations, Helps in Administration, Easy Co-Ordination and a Few Others, Importance of Sound Organisational Structure – Facilitate Administration, Increase the Efficiency of Management, Adoption of New Technology and a Few Others, Importance of Sound Organisational Structure, Importance of Sound Organisational Structure – Facilitates Effective Management, Co-Ordination of Activities, Encouraging Growth, Channel of Communication and a Few Others. It facilitates proper administration. The need for organisation arises when two or more people work together. It involves the structure of relationships among positions and jobs with the object of accomplishment of enterprise objectives. A small company or one operating in a very competitive market could opt for such a structure. A good organisation clearly defines the scope of work of every person and allows them to grow in that sphere. It is a pattern of relationships that has been generated through a conscious planning process. It cannot be seen. The importance of sound organisational structure can hardly be over emphasized. Poor organisation leads to improper arrangement of duties and responsibilities. 5. Simplified organizational structure. In short, existence of a good organisation structure is essential for better management. (5) It Encourages Human Use of Human Resources: A sound organisation provides for job rotation and job enlargement and makes job meaningful and interesting. The organizational structure also determines how information flows between levels within the company. The typical depiction of structure is the organization chart. It would consider the impact of customers, suppliers, competitors, legal and political changes and cultural and economic conditions. A sound organization structure facilitates effective operation of the enterprise. No one gets into any sort of wrong and misunderstood communication as in every sort of the structure, the works are somehow divided and it forms the best part of the organizational structure. 9. There is a planning, policy making, direction and co-ordination in the administration level to achieve the objectives. (iv) Set up mechanisms for coordination. Organisation is a fine structured process in which individuals interact (acting and reacting upon one another) to accomplish objectives. In today’s pitch various business organizations have started realizing the importance of organizational design as well, which needs to be implemented in business organizations. 19. Sound organisation structure stimulates creative thinking and initiative amongst organisational members by providing well defined patterns of authority. x. 6. Effective organisation enables growth and diversification through decentralisation and divisionalisation on geographical or product basis. It permits management to respond in time to the changes in the environmental influences and make necessary adjustment to satisfy the new demands of society. There are many types of organizational structures. Management, Functions, Organisational Structure. It develops cohesiveness in the enterprise. An organisation provides sound foundation for effective managerial control. It prepares them to take more responsibilities whenever need arises. After reading this article you will learn about Organisational Structure:- 1. Sound organisation encourages human use of human resources. Different jobs and positions are interrelated by structural relationship. DO NOT copy word for word. Encourages Initiative 14. 1.1 IMPORTANCE OF ORGANIZATIONAL STRUCTURE Organization chart contains of functions, responsibilities, authorities, relationships, and communications of individuals of employees and management within each department. It is an important means of bringing coordination among the various departments of the enterprise. 5. Training and Development of Personnel: A good organisation offers an opportunity for the training and development of personnel. It ensures, above all, accomplishment of objectives and strategies. Better Human Relations and a Few Others. Expenses mount up. Ensures Co-Operation among Workers 12. Every organization has a structure which defines the hierarchy, the distribution of roles or the responsibilities within the organization. Organisational structure encourages prompt decision-making and effective control through decentralization. Increases management efficiency – Good organisation assures all round efficiency by bringing definiteness all around, matching jobs with individuals and individuals with jobs, by utilising best skills, experience, abilities and specialisation and by avoiding delays and wastages. For example, a company could have a group working in information technology, another in marketing and another in finance.Each department has a manager or director who answers to an executive a level up in the hierarchy who may … It enables smooth management and operation of the enterprise, thereby, enhancing managerial efficiency, e.g. It permits management to respond in time to the changes in the environmental influences and make necessary adjustments to satisfy new demands of the society. Sablynski [20] succinctly defined organizational structure as “how job tasks are Designing an organization structure … Brings unity in direction, facilitates control and co-ordination – Efficient delegation and. Essays, Research Papers and Articles on Business Management, Organisation Structure: Meaning, Elements and Forms, Difference between Mechanistic and Organic Organisation Structure, Organisation Structure and Management Objectives, Organisational Structure: Functional Structure and Divisional Structure. A sound organisation structure encourages better relations between the worker and the management, and increases employee satisfaction and decreases employee turnover. job rotation, job enlargement, delegation, etc. In other words, the value of each individual’s contribution is enhanced and at the same time the accomplishments of the group are increased. 5. As mentioned above, organizational structure has played its role in assisting a company to foresee the problems in line of command or even communication problem in order to develop or improve an employee’s skills and management . In order to understand an organization, we need to take a close look at its organizational structure. These training institutes are collecting data directly from the field used in the training. These organizational cultures are important because they can encourage employees to work in different ways. the most important issues facing organizational research- ers. A good organisation will divide and sub-divide the activities in such a way that the activities of different segments become complementary. It facilitates in introducing changes in the enterprise by modifying the authority and responsibility relationship in the wake of new developments. But once the business starts to grow and separate departments are created for buying, selling, accounting, administration and so on, the need for organisation undoubtedly grows with it. It prevents duplication of functions and makes it possible to achieve maximum production with minimum efforts. Organizing is an important means of creating coordination and communication among the various departments of the organization. Entire organisation environment and climate is favourable for productivity and job satisfaction. Alfred D. Chandlre said that the strategy has a definite influence on structure. An organisation works in a dynamic environment and to cope with the changing business situation better technology is always helpful. Sound and well-designed organisation, on the other hand, improves company administration, encourages growth and diversification and tones up overall operations of the company. 7. Activities that should be integrated or centralized are spread out and put to improper supervision. It enhances the productivity through avoidance of duplication of activities and the consequential confusion as well as wastage of efforts. Plagiarism Prevention 5. Importance of Organisational Structure Importance of Sound Organisational Structure– Facilitates Administration, Promotes Growth and Diversification, Fosters Co-Ordination and a Few Others. As Lounsburry Fish points out-“Organisation is more than a chart, it is the mechanism through which management directly co-ordinates and controls the business. Ernest Dale’s description of organising consists five-step process provides a good framework for the discussion of organisational structure. Organising makes possible the effective operations of a group. The initiative and creativeness encouraged in the organisation will make it dynamic and responsive to the new situations. Importance of Organisational Structure: The following are the importance of organisational structure: 1. It promotes effective leadership and thereby ensures good employee morale. Good organisation increases the efforts of the employees and the working facilities. A sound organisation utilizes the human and other resource of the organisation properly. A flexible organisational structure is needed to adopt a new technology. As an organization design consultant, I am sometimes asked by clients how important formal structure is, relative to other factors such as culture or rewards. Delegation of authority provides sufficient freedom to supervisors and this encourages initiative, creative thinking, resourcefulness, independent thinking spirit of innovation and enterprise among them. For example, you will absolutely design your sales team to be in direct communication with your development team. Stimulates Creativity. A company's hierarchy allows employees on different levels to identify the chain of command and serves as a reference point for decision making. Sound organisation helps in keeping the various activities under control and increase the capacity of the enterprise to undertake more activities. 7. People know that they are supposed to do, well in advance. Content Filtration 6. automation and computerisation. Good organisation removes red-tapism and corruption, prevents duplications of work, makes communication easier, and provides a sound basis for workers participation in the management. Sound organisation (as a foundation for management process) can provide following typical results: i. It comprises people and it is the agency through which management performs the important functions of direction, co-ordination and control. Content Guidelines 2. 9. Technology is a combination of tools, techniques and know- how and has a major influence on organisational structure. The organisation can undertake more activities without dislocation. Organizational structure is important for any growing company to provide guidance and clarity on specific human resource issues, such as managerial authority. 3. This ineffective administration can be removed by having a sound organisation. xi. Huge Collection of Essays, Research Papers and Articles on Business Management shared by visitors and users like you. Aid to Management 9. Helps in effective communication: Such organizational structures help in making the communication system in the company very fine and smooth. Coordination includes control systems, decision-making systems and information systems. Stability strategy and growth strategy. Managers deliberately structure and coordinate organizational resources to achieve the organization’s purpose. It is the key to managerial success. Human relations improve in a good organisational set up. There will be a sufficient scope to try new ideas in improving the working of the organisation. Changes in the organisation may result in the appointment of additional staff members, de-centralisation of authority and responsibility, raising of additional capital, identification of the consumer’s satisfaction and preferences, expansion of sales promotion activities and the like. It does not mean that less important department activities are neglected. It is a combination of many factors, such as management style, management values, the formal organisation (rules, policies, procedures, practices, organisational structure, reward system) informal organisation (norms of behaviour beliefs, values and attitude of the group) the communication system and all other managerial systems. Brings unity in direction, facilitates control and co-ordination – Efficient delegation and effective communication system, and well knitted relationships bring unity in command and direction, fixed responsibilities and division of work and facilitate control and co-ordination. Sound organization structurecan contribute greatly to the survival continuity and stability of the enterprise. It Promotes Growth and Diversification: Only sound organisation designed on scientific principles can create conditions conducive to planned expansion and diversification of the activities of the enterprise. viii. It brings together employees from different functional specialties and allows geographical division. It helps in optimum use of equipment, machinery etc. Students without an undergraduate degree in business can take courses in business foundations that … An organisation is not merely a chart or a lifeless structure. It shows who the subordinates are and who are seniors. Most companies either have a tall or flat organizational structure. It affects employee performance. Organisational structure must be so designed as to make possible the attainment of the objectives of the business for five, ten or fifteen years hence. All these factors assure stability. Organizational structure allows the expressed allocation of responsibilities for different functions and processes to different entities such as the branch, department, workgroup, and individual. Delegation of authority is also an important means of directing the sub-ordinates. It increases management’s efficiency and promptness, avoids delay and duplication of work and motivates the employees to perform their job efficiently. Organisational structure lays down both channels and the patterns of communication. Organisation is an important way of achieving coordination among different departments of an enterprise. Before uploading and sharing your knowledge on this site, please read the following pages: 1. Prohibited Content 3. A sound organization facilitates in the following ways to achieve organisational objectively: A properly-designed organization provides proper division of labor or departmentalization, consistent delegation of authority and clear authority relationships which facilitates smooth functioning of an organisation. It also provides for efficient methods of selection, training and promotion of employees, further not as machines. Area and activities of a business grow if it has a well-knit organisation. 5. The effect of exogenous changes in … Workers, participation in organisation increases their cooperation and improves their will to work. Right man, right time and the right job can also be applied to them. 15. (i) List the work that needs to be done to accomplish organisation goals. There are primarily two strategies. For example, a manager can report directly to the president instead of a director, and her assistants are only two levels below the president. Persons are allowed to try new ideas for improving upon their work. xii. Proportionate and balanced emphasis is put on various activities. The Importance of a Good Organizational Structure. v. It is more than a chart—it is the best mechanism for managerial leadership, co-ordination and control. It encourages creativity, i.e. 4. If offers stimulating opportunities to people at all levels to use their skills on jobs best suited to their nature. 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