Organizational Charts

Organizational diagrams showing individual jobs, department structure, and chain of command.

Structure

Depict enterprise structure

Are used

·  For reorganization
·  To explain the inner workings of the business to new employees, customers, banks, etc.

Display relationships among departments or employees

·  Who is responsible, for whom and for what
·  Shows superior/subordinate relationships
·  Workflow for intraorganizational communication

Pros and Cons

of various business structures

Modern Organizational Structure

Flat hierarchy, strongly decentralized decision-making, high level of autonomy in individual focus areas, increased scalability.

Complex, highly compartmentalized structure

Employees tend to focus more on their own advancement than on the task at hand

Consumer-Oriented Business

The customer is the driving force for all processes

Choosing an Organizational Structure

A company's structure should be oriented toward its concrete position in the business world (size, age, growth, number of branches, business environment).
Older and larger companies repeat successful behavior and formalize their processes
Large enterprises have expanded coordination requirements
The bigger the company, the larger the size of the average department
The more dynamic the business environment is, the more organic and flexible the structure
The more complex the business environment, the more decentralized the structure (flatter hierarchy)

Comparison

of business structures

Geographical Structure

·  Directed at regional submarkets
·  Business strategy adapted to regional ideosyncracies
·  Clear picture of who is responsible for results
·  Requires additional levels of hierarchy, difficult to achieve corporate identity

Holding Structure

·  Strongly diversified, multinational concerns
·  The parent organization focuses on few tasks, mostly administrative in nature
·  Allows spreading losses within the group, favorable financing opportunities
·  Little top-level expert knowledge, not synergistic, difficult to manage

No Structure

·  Startups and small businesses. Founder or owner is the boss
·  Highly fleximle, dynamic; can be overpowered by rapid growth

Functional Structure

·  Divided by function: top management, production, marketing, sales and distribution
·  High level of specialization; very effictive for routine tasks
·  Difficult to coordinate the various functions; responsibility rests heavily on management

Product-Oriented Structure

·  Structure of company is determined by product groups and business divisions
·  Clear responsibility for individual scope of activity
·  Management can concentrate on tasks that affect the company as a whole
·  Administration-intensive, highly susceptible to redundancy

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