Organizational structure means when the different functions are performed in organization to achieve its goals. In organizational structure various activities are assigned to different person to perform.
Importance of Organizational structure
- It helps in the organization of various activities.
- It clearly defines the roles and responsibility of business.
- It also defines levels and spam of management.
- Provides guidance.
- Clear reporting relationship among business organization.
Types of Organizational Structure
The organizational structure is mainly divided in two types are:
- Functional structure: Functional structure means when activities or jobs are divided on the basis of function. For example functions related to Production, Sales, Purchase etc
- Divisional Structure: Divisional structure means when the organization is on large size and producing more than one product. For example Soap, Medicine, Cosmetic, etc. Activities related to medicines are under medicine department, etc.
Factors affecting Organizational structure
- Job design: In organizational structure work is divided into various jobs and it these jobs are performed by different person and submitting report to its manager.
- Departmentalization: When the jobs are divided among employees and these jobs are specified under different departments.
- Spam of management: It means how many employees are effectively managed by single manager or how many subordinates are working under single superior. The number of subordinates that a superior can effectively supervise is known as span of management or span of control.
- Delegation of authority: Delegation of Authority means granting of authority by the superior manager to his subordinates in order to accomplish particular assignments. This process of dividing the work with others and giving them authority to do it is referred to as ‘Delegation’.
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