The need for organisation arises when two or more people work together. Aid to Management 9. In order to understand an organization, we need to take a close look at its organizational structure. 17. It ensures closer co-operation and higher employee morale. A one man business, will have no difficulty about coordinating the efforts of the buying, selling and other management functions of the business. To uncover the trend of events in the scene, a review of related literature was carried out . Implementation of policies and the achievement of the goals become easier. Entire organisation environment and climate is favourable for productivity and job satisfaction. For example, you will absolutely design your sales team to be in direct communication with your development team. Join Judy Steiner-Williams for an in-depth discussion in this video, Importance of organization structure, part of Writing in Plain English. Confusion, delay and duplication of work are avoided in good organisation. There should be an effective administration to achieve the objectives of the business. Terms of Service 7. Sound organisation alone assures accomplishment of objectives and strategies as per predeter­mined plans and policies. There are many types of organizational structures. 2. Sound organisation (as a founda­tion for management process) can provide following typical results: i. Better administration and control – A sound organisation helps in achieving better managerial administration and control. Sound organisation has flexibility and also stability. A good organisation helps in proper assignment of jobs, gives due credit to all the employees, reduces conflicts, chaos and duplication of work. Duplication of work, wrong planning, inefficient personal, lack of motivation, improper allocation of duties and responsibilities, absence of co-ordination, communication gap, and improper instructions are the ingredients of ineffective administration. But within these limits people are given freedom to show their talent. A good organizational structure facilitates attainment of objectives through proper coordination of all activities: ADVERTISEMENTS: It has a built-in system of “checks and balances” so that the progress towards the attainment of objectives is evaluated along the way so that any required adjustments can be made and any new decisions required can be taken. A good organisation enhances capacity of individuals and enables them to take advantage of the skills and experiences. It helps an organisation in the following ways: It helps individuals to enlarge their capabilities. Departmentation enables proper planning of work. It ensures close co-operation and higher employee morale. Instead of a single chief executive in a large company, Peter Drucker would prefer a team with a captain who is more than one among equals and each member of the top management team has assigned areas in which he makes formal decisions and for which he is res­ponsible. v. It is more than a chart—it is the best mechanism for mana­gerial leadership, co-ordination and control. Having a strong organizational structure is paramount to the success of any business. The Importance of Organizational Structure in Effective Management. Organisation provides job rotation, job enlargement and enrichment. Every organization has a structure which defines the hierarchy, the distribution of roles or the responsibilities within the organization. Sound organisation structure stimulates creative thinking and initiative amongst organisational members by providing well defined patterns of authority. Departments/units are formed on the basis of requirements of the enterprise. An organisation is concerned with activities such as recruitment of staff, delegation of authority, assignment of responsibility co-ordination and control of activities at different work centres, etc. INSTRUCTIONS: Importance Of Organizational Structure In Effective Management project material. slow and poor decisions, lack of co-ordi­nation of activities, poor specification of duties, destructive conflict among members, non-synchronised timings in actions of individuals, sluggishness in response to changes in techno­logy and environment, etc. Sound organisation encourages human use of human re­sources. 7. Following are some of the advantages of a good organisation: 1. It thus ensures the optimum use of staff. rise in the level of mutual trust, support, openness and completeness of communication, widespread participation in planning and decision making. 9. Organisation is one of the basic functions of management. A sound organisational provides training to new staff members before placement and give refresher training to the existing staff members to improve their efficiency. It is the key to managerial success. (3) It Ensures Optimum Use of Human Resources: Organisation affects human resources in a number of ways such as recruitment, training, placement of workers, bringing harmony in their efforts, improving the communication network and motivating them to improve their efficiency. Clear-cut accountability provides re­cognition for the specialist and the professional in terms of their achievement. It brings together employees from different functional specialties and allows geographical division. It develops voluntary co-operation and best motivation of employees. All these factors assure stability. All these factors assure stability to the enterprises. The organizational structure also determines how information flows between levels within the company. Regele Carol I, nr. It is the backbone of a management and without it; no management can manage the various operations of an enterprise. Report a Violation 11. Independent, creative thinking is stimulated. Sound organisation is an essential prerequisite of efficient management. Good strategy involves taking account of where a company finds itself in terms of the external market and its internal organizational structure. (v) Monitor the organisational structure’s effectiveness and make adjustments as needed. The organization responds more quickly and efficiently to market needs, and focuses efforts solely on the objectives of each business un… DO NOT copy word for word. 3. vii. The training may be given within the company or outside the company according to the training facilitates available. It helps in growth and diversification of the activities of an organisation. Sound organization structurecan contribute greatly to the survival continuity and stability of the enterprise. The structure of the company can be changed whenever the growth and expansion activities are carried out. 5. The effect of exogenous changes in … Disclaimer 8. It means that due importance is given to each department according to its contribution towards the achievement of the objectives. It ensures steady growth and diversification. Organisation is a fine structured process in which indivi­duals interact (acting and reacting upon one another) to ac­complish objectives. Organizational Behavior helps us to study human being and their complex nature in organizations by identifying the … It is the basis for necessary team work among the various members of a common enterprise and helps in coordinating their efforts. Helps in Optimum Utilisation of Technological Innovations: The test of a good organisation is its success in adjusting to the new and changing situation. 6. Co-operation – A sound organisation ensures proper co­operation amongst its employees. Structure is important as a mean of getting people work towards common goals thus acting as facilitator in pursuit of organizational goals. Designing an organization structure … Organizational structures. Clear distribution of authority and responsibility, incentives offered for specialised work and freedom given to personal work, increases the spirit of constructive and creative approach in management. There will be a need for employing more persons whenever expansion and diversification takes place. The structure of such policies should be such as to uphold the principles of transparency, accountability, fairness, and responsibility. #2. Organizational structure is important for any growing company to provide guidance and clarity on specific human resource issues, such as managerial authority. Report a Violation 11. It promotes effective leadership and thereby ensures good em­ployee morale. Only an unsound organisation develops secret, influence and corruption. An enterprise takes advantage of the technological advancements through sound organisational structure. Meaning of Organisational Structure 2. This will bring an automatic co-ordination in the business. 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. With the help of a well-defined organisation management is able to perform the functions of direction, co-ordination and control. Content Filtration 6. Additional activities will not put any strain on the management. These training institutes are collecting data directly from the field used in the training. This ineffective administration can be removed by having a sound organisation. Thus, human capital can be fully utilised. This can be done through proper training and development programmes. The following are the importance of organisational structure: 1. Looking simple but organization will have to make sure that employees identify with organizational thoughts and willingly forgo personal interests. (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 policies and procedures are laid down for the guidance of managerial personnel. The growth of business means an increase in the scale of operation and diversification means starting of production of a new type of products. ix. This is the most traditional of the organizational structures that businesses use. It Stimulates Independent, Creative Thinking and a Spirit of Initiative through Well-Defined Areas of Work: An ideal organizational structure based on clear-cut demarcation of authority, higher range of responsibility, discretionary freedom granted to personnel, incentives offered for specialized work etc., will certainly foster the spirit of constructive and creative approach in management. It also helps in making communication easier and smoother. Ensures Co-Operation among Workers 12. Management creates and forms various groups of closely- related and similar activities; which is necessary for the functioning of the enterprise. Prohibited Content 3. xiii. People can work in teams and not like robots or ma­chines. “Every member knows how he and his work fit in to the total picture, what he is to do when and where he is to do it and who helps him” The importance of organisation can also be judged from the fact that a good organisation is now regarded as the foundation of sound management. The functions like co-ordination and control require a proper division of various functions and their assignment to suitable persons. The job training is much better and gives good results as compared to class room training. 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. Organisation structure coordinates the activities of the organization properly. She concluded that technology is a major influence on organisational structure. Activities that should be integrated or centralized are spread out and put to improper supervision. 18. With the growing concepts and complexities of large scale business, the need and importance of organisation has grown substantially. Content Guidelines 2. 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. Encourages Initiative 14. automation and computerisation. It shows who the subordinates are and who are seniors. Organisation classifies the entire business activities into departments. All these ensure an optimum use of human resources of an enterprise. In an environment in which an organisation is dynamic and constantly changing to cope with ever changing situations, it is very important to encourage the employees to take proper initiative. The typical depiction of structure is the organization chart. Helps in effective communication: Such organizational structures help in making the communication system in the company very fine and smooth. Small companies usually use a flat organizational structure. A good organisation helps in encouraging people to try new ideas. 4. 7. iii. This is referred to as the division of work. It also provides for efficient methods of selection, training and promotion of employees, further not as machines. It facilitates administration by avoiding waste motions, overlap in work and duplication of effort. There may also be a need to delegate new powers for making best utilisation of technological changes. It is a systematic combination of people, functions and facilities. An organisational structure is defined as the pattern or network of relationships that exist among various positions. Increasing use of automation and computers have a tendency toward centralisation as these new equipments are concentrat­ed at one location and they do help centralised decision-making. The actual work is completed at lower level of the organisation. It is felt by people. Following are the advantages of a sound organisation structure: 1. Account Disable 12. It identifies each job, its function and where it reports to within the organization.” A structure is then developed to establish how the organization operates to execute its goals. It stimulates initiation and creative thinking. Management, Organisation, Organisational Structure. In short, a properly conceived organisation structure facilitates effective communication, precise delegation, smooth management, proper co-ordination and control, closer co-operation, effective leadership, higher employee morale, managerial efficiency, steady growth and diversification, optimum use of human and other resources, optimum use of technological improvements development of managers, creativity among the staff and accomplishment of enterprises objectives. These organizational cultures are important because they can encourage employees to work in different ways. 6. 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. Normally, these help remove corruption, secret and influence. An organisational structure should be designed to clarify who is to do what takes and who is responsible for what results, to remove obstacles to performance caused by confusion and uncertainty of assignment, and to furnish decision-making and communications networks reflecting and supporting enterprise objectives. Before uploading and sharing your knowledge on this site, please read the following pages: 1. 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. It prevents duplication of functions and makes it possible to achieve maximum production with minimum efforts. 13. With these general remarks, now we state here the important advantages of organisation: Organisation aids management in accomplishing enterprise objectives. In the scientific world, there is a lot of innovations and inventions identified in the area of production, distribution and personnel management. A sound organisation by providing for training of staff at different levels and by proper delegation and decentralization helps development of managers. Human relations improve in a good organisational set up. Organizational structures determine what actions are feasible and most optimal. Alfred D. Chandlre said that the strategy has a definite influence on structure. Everything you need to know about the importance of organisational structure. 10. Sometimes collaboration is more important than competition, and at times strict control is more important than creative freedom. 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. Permits Optimum Use of Resources 7. Well-designed and balanced organisation facilitates management and operations of the enterprise. The answer to that question is a straightforward “Yes.” Your Organizational Structure not only captures who is responsible for what but also the reporting and communications lines that tie everything together. The importance of organizational structures in the implementation of a strategy is hard to overemphasize. Importance of Organizational Structure and Design : 1. This will give job satisfaction to employees. It gives proper recognition to the contribution of each individual, values their co-operation hence gaining their sincerity and loyalty. Image Guidelines 4. This ensures that each person and department will contribute to his best capacity and skill, will feel definite and specific responsibility, will avoid duplications and overlaps and will improve the efficiency and speed of work. It lays solid ground-work for focusing the attention and action of management on the accomplishment of the objectives of enterprises. It integrates the various functioning of various departments. There may be a collective office of the chief executive to direct all operating and staff departments. Organizational structure is the foundation for the development of any organization. Sound and well-designed organisa­tion, on the other hand, improves company administration, encourages growth and diversification and tones up overall operations of the company. Simplified organizational structure. Importance # 1. Facilitate Administration: 4. 2. 4. (ii) Divide the total work load into tasks that can logically and comfortably be performed by individuals or groups. It involves the structure of relationships among positions and jobs with the object of accomplishment of enterprise objectives. Organisation structure provides the formal channel of communication which is necessary for smooth functioning of the organisation. Abstract. 12. It lays the basis for other managerial functions such as planning, direction, co-ordination and control. Ensures Optimum Utilisation of Material Resources and Human Efforts: 6. [19], organizational structure is defined as “the estab- lished pattern of relationships among the components of parts of company (The way a company is set-up). Use of better technology – A growth oriented organisation encourages the use of better technology. Importance of Organisational Structure: The following are the importance of organisational structure: 1. Organizational boundaries often create new barriers to the free flow of information, materials and decisions. A sound organisation utilizes the human and other resource of the organisation properly. It helps equitable distribution of work. viii. Thus, organisation facilitates the growth of enterprise. Organising makes possible the effective operations of a group. Copyright 10. Being organized is the process by which the work is divided among departments and employees, and these department and jobs are linked together to form a unified system. 6. In this sense, it is the foundation of management as well as its chief tool. It is therefore very important for an organization to take utmost care while creating the organizational structure. It enables smooth management and operation of the enterprise, thereby, enhancing managerial efficiency, e.g. In short, existence of a good organization structure is essential for better management. Inadequate and unscientific organisation may result in duplication of work and efforts and some of the important operations may be left out. 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. Avoids confusion and misunderstanding – By assigning definite duties and responsibilities, establishing definite superior-subordinate relationships, clear cut delegation of authority and by proper selection and training of the Staff, organisation brings definiteness and knits all its segments to operate together to realise its goals, Each of its departments or employees knows his specific mission, duty, authority and responsibility. It is a pattern of relationships that has been generated through a conscious planning process. The structure should clearly determine the reporting relationships and the flow of authority as this will support good communication – resulting in efficient and effective work process flow. The stability strategy involves a predicted environment and a little chance in external changes. Efficient organisation, thus, avoids all misunderstanding, confusions, conflicts, duplications and gaps. Now-a-days training institutes give training to the needy persons with the help of the different experts from various fields. It helps the management in several ways. Training and Development of Personnel 13. It Provides Ample Scope for Training and Development: An effective organisation facilitates delegation of authority which is an important device for training and developing the personnel. A big size of organisation may increase the number of functional departments, number of managerial levels, and number of employees with diversified responsibilities. But organizational (hierarchical) structures are only controlling tools. Human, technical and material resources are put to good use. It facilitates in introducing changes in the enterprise by modifying the authority and responsibility relationship in the wake of new developments. Organisational structure encourages prompt decision-making and effective control through decentralization. Technological Innovations and Improvements: A sound organization structure which is adaptable to changes can make the best possible use of latest technological innovation and improvements. (9) It Ensures Co-Operation among Workers: A good organisation promotes mutual goodwill and co-operation among workers also. Proper organisation provides .satisfaction and various incentives to employees. Importance of organizational behavior: It is very important to study organizational behavior because it provides an understanding of why people behave as they do in organizations.In any organization, the importance of organizational behavior has tremendous necessities. Inadequate organisation may not only discourage but also actually preclude effective administration”. 4. Organisation creates the relationship between top level executives and lower level staff members. Effective organisation enables growth and diversification through decentralisation and divisionalisa­tion on geographical or product basis. Efficient organisation prevents growth of laggards, intrigues, wire-pulling and other forms of corruption. Confusion and misunderstanding over who is to perform what work is avoided by specifying the role of managers clearly. The organizational structure of a company affects which department is powerful, which department takes more decisions or which department has less power.. resourcefulness, independent thinking, initiative, spirit of innovating etc. When your company starts growing in size, some of your employees may be in cross-functional teams reporting to different managers. It is the backbone of a management and without it; no management can manage the various operations of an enterprise. They formally defined framework of an organization’s task and authority relationships”. It ensures, above all, accomplishment of objectives and strategies. It ensures, above all, accomplishment of objectives and strategies. The disadvantage lies in its rigidity and the length of time needed for information to flow through the organ… Most companies either have a tall or flat organizational structure. A constant theme during meetings over the period of 12 years was how to build an organization and how the different economic crisis have forced organizations to rethink their strategies and change the way they operate. Organisation provides scope to its employees for development. It ensures that every individual is placed on the job for which is best suited. Stimulates Creativity. Prohibited Content 3. Ensure growth – A well-defined organisation structure will help an enterprise to grow and expand its operations. Corporations need a structured hierarchy to establish internal control. Best plans may fail if these are not executed properly. 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