The structure of an organization is the sum of total ways in which it divides its labour into distinct tasks and then achieves coordination among them. (Mintzberg, 1979). An organization can be structured in many ways depending on their objectives. An organizational structure consists of activities such as task allocation, coordination and supervision which are directed towards the achievement of organizational aims. (www.wikipedia.org)
When an organization grows beyond the smallest operation, management divides work vertically, as those at the top delegate more of their work to those below them. The vertical hierarchy establishes what decisions people at each level can make. Centralization is when those at the top make most decisions, with managers at divisional level ensuring those at operating level follow the policy while Decentralization is when a relatively large number of decisions are taken lower down the organization. (Boddy,2008). Transfer of decision making power and assignment ofaccountability and responsibility for results. It is accompanied by delegation of commensurate authority to individuals or units at all levels of an organization even those far removed from headquarters or other centres of power. (www.businessdictionary.com)
An organization is structured in a certain way based on some factors. Size is a factor because the bigger the organization, the more complex its structure. If the company is small, the design is generally simple. A small company does not have to undergo a formal structure. Larger organizations depend more on authority delegation and formal work responsibility, because a bigger company is harder to manage. Another factor is the lifecycle of the organization. An organization undergoes the stages of birth, youth, midlife and maturity. During birth, the company is in its blossoming phase and without a formal design. During the youth phase, the company is attempting to expand, with the needs of the customers becoming the focus. In the midlife phase, the company has developed a formal design with a chain of command. In the maturity stage, the organization is more focused on maintaining the stability it has developed. Yet another factor is technology. Through the use of technology, companies are able to operate more efficiently and at lower costs. By using tools, equipment and strategy, technology helps workers accomplish their core tasks at a quicker pace. If a company has the appropriate organizational structure blended with the right technology, it can attain organizational success. (Factors Determining Organizational Structure: Identifying the Key Components of an Organizational Design, Grace Ferguson, 2010).
The organizational structure may vary in respect to the aims of the company or the industrial situation the company is in, if a company finds itself losing ground in the market it can choose to restructure its organization to achieve a better result, this is happening more often nowadays due to a...