One of the first steps in establishing an organization is defining its’ organizational design. There are many factors one must consider before running a business. For instance, will the organization be established as a Tall or Flat structure, will it have a Centralized or Decentralized Authority, and will it be a Line organization or Line-and- Staff organization. Each decision needs to reflect the businesses value, goals, and how it will achieve each objective goal.
A lot of older businesses started as Tall organization structures. This essentially has a longer chain of command in comparison to other structures. Employees are not empowered to accommodate customers’ requests and needs. In addition it wasn’t uncommon to have 14 levels of management, which an employee must respond to. As a result of the numerous levels, mis-communication was common; also the numerous management levels made it more difficult to respond to market trends and demand.
As a solution, newer businesses are implementing the Flat organization structure. This type of organization offers more control, as all employees report to each department manager. This structure empowers employees to accommodate customers and respond quicker to market trends and demands quicker.
Subsequently a company will need to decide if it will have a centralized or decentralized authority when multiple locations open. A centralized location controls the decision making at the headquarters’. This ensures that all of the stores are the same regardless of its location; this includes policies, procedures, products and food. While controlling how other locations are run may seem like a great benefit it certainly has its draw backs. For one the headquartered business often uses marketing, products, or food which is popular or appropriate to the headquartered region; these same products may not be as appropriate or popular in