Why is it important for a business to develop an organizational structure explain with example?

Business

The importance of organizational structure to businesses and other types of operations is something that just about any successful enterprise understands. Without proper attention to the creation of a cohesive and efficient structure, the ability to carry out tasks that have to do with the stated goals of the organization are highly unlikely to occur. There are several basic areas in that demonstrate this, including the areas of communication, the assignment of responsibilities, the purchase of raw materials, and the marketing of the goods and services produced.

One of the key examples of how the importance of organizational structure impacts an operation is the creation of specific job positions within the organization and the assignment of responsibilities to each of those positions. Without clear, concise assignments, both employees and managers would be limited in how to respond and carry out essential tasks. By establishing the positions and determining how they work in tandem, order is brought to the operation, allowing the enterprise to effectively pursue its goals.

Another aspect of the operation that illustrates the role of organizational structure is the establishment of a line of communication that includes every level of the structure. By implementing and maintaining this line of communication, employees can effectively interact with managers who then interact with their peers and various officers and executives, often making it possible to identify both opportunities and challenges much sooner than would be possible otherwise. As a bonus, a reliable line of communication helps to boost morale, which is likely to have a positive impact on productivity.

Organizational structure's importance is also seen in the process of purchasing raw materials and other resources for the operation of the business. Clearly defining who can manage these tasks and empowering these employees to gather data and work within company guidelines to place orders for goods and services will ultimately aid every aspect of the operation. Checks and balances to make sure ordering is done responsibly and in relation to existing inventories helps to prevent excessive inventories that can tie up company resources and also create a greater tax burden.

Even the marketing process can be cited as a means of understanding the importance of organizational structure. Marketing executives may use the structure to communicate with sales personnel, owners, and others who provide inspiration for ways to create ad campaigns and otherwise market the companies goods and services. Without using the existing structure to gather data and put it to the best possible use, the sales effort would be mainly passive, and not likely to generate a great deal of revenue for the company.

Without structure, organizations accomplish very little and will often fail in a short period of time. Business owners who understand the importance of organizational structure and go to great lengths to create a viable structure can often see fruit from this approach, in the form of logical sequences in the production process, timely performance of tasks throughout the organization, and a sense of unity among employees that allows them to communicate and share ideas with one another. The end result is an organization capable of functioning efficiently and ultimately being successful.

After many years in the teleconferencing industry, Michael decided to embrace his passion for trivia, research, and writing by becoming a full-time freelance writer. Since then, he has contributed articles to a variety of print and online publications, including SmartCapitalMind, and his work has also appeared in poetry collections, devotional anthologies, and several newspapers. Malcolm’s other interests include collecting vinyl records, minor league baseball, and cycling.

After many years in the teleconferencing industry, Michael decided to embrace his passion for trivia, research, and writing by becoming a full-time freelance writer. Since then, he has contributed articles to a variety of print and online publications, including SmartCapitalMind, and his work has also appeared in poetry collections, devotional anthologies, and several newspapers. Malcolm’s other interests include collecting vinyl records, minor league baseball, and cycling.

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