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What Is Organizational Structure And Its Importance

It is very important for any organization to make a strong organizational structure for its business. It is something like a job-task pyramid sp if you have a company you can not run it without putting a strong organizational structure.

What is Organizational Structure

Organizational structure is simply defined as the method by which a company communicates, distributes responsibility, and adapts to change. According to the Encyclopedia of Small Business, “An organizational structure defines the scope of acceptable behavior within an organization, its lines of authority and accountability, and to some extent, the organization’s relationship with its external environment.

Organizational structure is a pattern of relationships that has been generated through a conscious planning process and according to Peter Drucker, a wrong structure will seriously impair business performance and may even destroy it.

Also, Organisational structure means a developed enterprise being operated to achieve the goals. It involves the structure of relationships between positions and jobs to reach the companies target.

What happens if you have a bad Organizational Structure

If your Organizational Structure is weak employees will find it difficult to know who they officially report to in different situations, and it may become unclear exactly who has the final responsibility for what.

Also, you will face poor communication, poor customer service, reducing productivity, high employee turnover, a lot of problems, and the inability for the business to grow.

Importance of Organizational Structure

-Encouraging Growth

A good Structure encourages you business growth which provides the framework within which an enterprise functions. If it is flexible it will help in meeting challenges and creating opportunities for growth.

-Clear Authority Relationships

Organization structure allocates authority and responsibility. It specifies who is to direct whom and who is accountable for what results. The structure helps every organization member to know what his role is and how it relates to other roles.

-Making Use of Technological Improvements

A good structure can make the best use of new technology like marketing through social media platforms. It will modify the existing pattern of authority-responsibility relationships in the wake of technological improvements.

-Stimulating Creativity

Everybody has known the area where he specializes and where his efforts will be appreciated so this will encourage the creativity of your employees and they will love to work hard and give your business more and more.

-Proper Balancing

Those who are more critical to the enterprise’s success might be placed higher in the organization which means that Organization structure creates a proper balance and emphasis of activities.

-Location of Decision Centers

A good structure provides the location of centers of decision-making in the organization. That you will know very well who will you get the order from and who is in charge to make decisions. 


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