Factors Affecting Organizational Structure

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Issues That Influence an Organizational Structure by Company

A company's organizational structure can determine its success or failure upon entry into the market. The decisions a small-business owner makes in choosing management and employee roles within the company help determine the organizational structure and can have a large influence on the culture within the business. If structure doesn't reflect the owner's business goals, employees may have a hard time working successfully for the company.

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As a small-business owner, the size of your company can have a significant influence on the organizational structure of your company. If you're running a sole proprietorship with a few employees, you may not even need a well-defined organizational structure if you perform all the management functions of the business. A larger organization requires more structure to allow its different components to communicate effectively with one another. For example, a full-service restaurant requires a kitchen manager, floor manager, bar manager and general manager to run each division within the establishment and keep the employees in each division working to task. Stage of Development

The stage of your company's development can dictate its needs regarding organizational structure. The youth stage of a company's life cycle emphasizes growth and the needs of the customer. This may require you as a business owner to develop an organizational structure around increased customer service, including a system to handle complaints and develop better service strategies. At this stage you're still very much in control of the majority of the company's day-to-day business decisions. By contrast, in the midlife stage of development, your company may require more levels of management to handle the growing departments with the company. Organizational...
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