Organisational Structures

An organisational structure defines how activities such as task allocation, coordination and supervision are directed towards the achievement of a business's aims. The structure determines how information flows, how decisions are made and how employees are grouped. Choosing the right structure is a critical strategic decision.

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Why Organisational Structure Matters

The structure of a business affects:

• Efficiency — how quickly and effectively work gets done
• Communication — how information flows between levels and departments
• Motivation — how empowered and autonomous employees feel
• Coordination — how well different parts of the business work together
• Accountability — how clear it is who is responsible for what
• Flexibility — how quickly the business can respond to change

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Types of Organisational Structure

1. Functional Structure

A functional structure groups employees by specialisation — for example, marketing, finance, operations, HR and sales. Each function is headed by a senior manager who reports to the CEO or managing director.

Advantages: