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Four elements of organizational structure macy s

An ineffective structure can cause significant problems for a company, including lost profits, rapid employee turnover and loss in productivity.

Management experts use the six basic elements of organizational structure to devise the right plan for a specific company. Departmentalization Departmentalization refers to how the organizational structure groups the company's functions, offices and teams. Those individual groups are typically referred to as departments. You could also divide the business into groups based on product or brand lines, geographic locations or even customer needs.

Chain of Command Most organizations, from businesses to nonprofits to the military, utilize a chain of command.

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This helps eliminate inefficiencies by having each employee report to a single manager, instead of to several bosses. In the corporate context, this type of chain of command is reflected in the organizational structure and affects job descriptions as well as office hierarchies. Managers assign tasks, communicate expectations and deadlines to employees, and provide motivation on a one-to-many basis.

When employees encounter obstacles or problems, they report back to the appropriate manager. When necessary, the manager is then responsible for taking the concern or issue up the chain of command to the next level, and so forth. This chain of authority or command streamlines corporate operations and communications for a more efficient and productive business.

Other factors to consider are the type of manager assigned to each specific department and the job descriptions of the employees reporting to that manager.

Four Basic Elements of Organizational Structure

Of course, managers who are placed higher up the chain of command typically have a tighter span of control, as they are directly responsible for middle-manager or team leaders. Centralization and Decentralization Organizational structures also rest somewhere on a spectrum of centralization. Generally, more conservative corporate entities adopt a centralized structure. In this design, C-level managers make all the decisions, management designs a plan for execution and front-line employees carry out that plan.

Elements of Organizational Structure

C-level officers are generally those at the uppermost level of the organizational chart, such as the chief executive officer, chief operating officer and chief marketing officer.

Centralizing authority in a business means that middle management typically is left with little to no input about the goals the company sets. This system is typical in larger corporate organizations, as well as at companies in more conservative industries. On the other hand, a company could adopt a more decentralized approach. A decentralized system allows all levels of management the opportunity to give input on big-vision goals and objectives.

Larger, company-wide decisions are still generally reserved to C-level officers, but departmental managers enjoy a greater degree of latitude in how their teams operate. Work Specialization In any business, employees at all levels typically are given a description of their duties and the expectations that come with their positions.

In larger companies, job descriptions are generally formally adopted in writing.

Work specialization ensures that all employees have specific duties that they are expected to perform based on each employee's work experience, education and skills. This prevents expecting employees to perform tasks for which they have no previous experience or training and from performing beneath their capacities.

Formalization Finally, organizational structures implement some degree of formalization. This element outlines interorganizational relationships. Formalization also determines company culture aspects, such as whether employees have to sign in and out upon arriving and exiting the office, how many breaks workers can take and how long those breaks can be, how and when employees can use company computers and how workers at all levels are expected to dress for work.

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