Understanding Organizational Structure: Key Concepts
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The organizational structure is the set of units that divide the work, and the relationships of hierarchy and subordination among its members, which manifest themselves in monitoring and control.
Advantages of a Clear Structure
A well-defined organizational structure avoids confusion by clearly assigning responsibility for results and ensuring tasks are executed effectively.
Delegating Authority
When a person entrusts a task to another and gives them the authority to do it, this is delegating authority.
Delegating is distributing tasks with some degree of authority, but the person who delegated the task remains responsible. When delegating, it's important to ensure the subordinate has the capacity to take authority and apply it successfully.
Before delegating, it's necessary to determine the task's features and limits. This enables the staff to undertake the task effectively.
The relationship between authority flowing from the top of the structure to the subordinate is called the chain of command.
The number of employees per manager is called the span of control.
Centralization
When the power of decision is in the hands of a few people, or even one person, this is centralization. In the latter case, it is absolute.
Centralization favors the coordination of tasks. However, if the organization is complex, it may be difficult for a few people to handle all the necessary information and make decisions.
Decentralization
Distributed decision-making power in many hands is called decentralization. Decentralization requires an adequate flow of information, correctly defined tasks, and an appropriate monitoring system to record decisions taken.
Departmentalization
Departmentalization involves grouping activities into homogeneous units to support the organization's growth.
Organizational Charts
Organizational charts represent the organizational units in which functions are grouped, reporting lines, and lines of authority.
Benefits of Organizational Charts
Organizational charts are useful for evaluating alternative organizational designs. They can reach a hierarchical level or even an intermediate one, identifying positions, names of occupants, or each employee.