Why Organizational Structure Is Important

Topics: Organization, Management, Structure Pages: 3 (521 words) Published: April 9, 2011
Why is organizational structure important to organization? What does an organizational chart shows?

Organizational structure is very important to an organization. An organizational structure should enable the organization to change or to respond according to its environment. If it is very effective it is called a flexible structure. Mainly there are two types of structures. They are organic structure and mechanistic structure.

Organic Structure – an organizational structure that is free flowing, has few rules and regulations, encourages employee teamwork, and decentralizes decision making to employees doing the job.

Mechanistic Structure – an organizational structure characterized by rigidly defined tasks, many rules and regulations, little teamwork, and centralized decision making.

On the other hand span of management goes to the same direction of the above structures. The span of management is the number of employees reporting to a supervisor. Sometimes this is called the span of control. This characteristic structure determines how closely the supervisor can monitor subordinates. Traditional views of organization design recommended a span of management of about seven subordinates per managers. However many lean organizations today have spans of management as high as 30, 40 and even higher. This can be categorized as follows as well.

Tall structure - A management structure characterized by an overall narrow span of management and a relatively large number of hierarchical levels.

Flat structure – A management structure characterized by a overall broad span of management and relatively few hierarchical levels.

Centralization and decentralization

Centralization and decentralization pertain to the hierarchical level at which decisions are made. Centralized means that decision making authority is located near the top of ht e organization. With decentralization the decision making authority is pushed downwards to the lower organizational...
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