How does your business operate right now? Who does what? Who reports to whom? When the roles, responsibilities and relationships of people in your business are unclear, work will not be accomplished in a timely and accurate fashion. Many companies invest significant time and effort into designing a robust organizational structure.
Organizational structure gives form and shape to your business
Coordinating the work your people do and their working relationships to let people work cooperatively and efficiently toward a common goal. Without forethought, as a business grows there is little flexibility and room for expansion. A strong organization structure blends talent, strategy and resources facilitating easy decision making because everyone is aware of their role.
Organizational Structure needs to work for your business
The most practical way to organize the flow of accountability and authority varies from business to business. The needs of your business are constantly transforming and as the size and complexity of your business changes your organizational structure should adapt. Your organizational structure should be the right fit for your business and should meet current demands. It is also important that it is flexible and scalable enough to accommodate future growth. There are many models for organization structure but your business should use one that best serves your needs.
Here are the 6 most common models for organizational structure:
Function Method
This is the process of organizing your business according to organizational functions or departments.
Product Method
This is the process of organizing activities according to product or product categories.
Process Method
This is the process of organizing activities based on the manufacturing process.
Geography Method
This is the process of organizing activities according to geography.
Type of Customer
This is the process of organizing your activities according to customer categories.
Hybrid design
Any of the combinations above.
Organizational Design will reach your objectives
Having the right roles and relationships in your business will ensure that your business will meet its current demands and organizational design will help reach your objectives. Reshaping your organization requires foresight into your future needs and a clear idea of your objectives. Take a look at our 3 guiding principles of effective organization design.