The Structure of

Organizations
Organogram
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Introduction to Organizational
Structure
What is Organizational Structure?
 Imagine a company as a complex organism. An organizational
structure acts as the skeleton, providing a framework for how the
different parts (employees) function together. In essence, it defines:
 Employee Arrangement: How various departments and teams are
organized within the company.
 Role Distribution: Who is responsible for what tasks and projects.
 Reporting Lines: Who employees report to and who makes key
decisions.
Introduction to Organizational
Structure
Why is Understanding Organizational Structure Important?
 A clear understanding of the structure offers several benefits for
employees and the organization as a whole:
 Clarity and Direction: Employees know who to report to for guidance and
clarification of their roles and responsibilities. This reduces confusion and
wasted effort.
 Effective Communication: Clear communication channels are established,
enabling information to flow smoothly across departments, fostering
collaboration.
 Empowered Decision-Making: When employees comprehend their roles
and the bigger picture, they can make informed decisions within their
domain.
Introduction to Organizational
Structure
The Impact of Structure on Performance and Culture
 The chosen structure significantly influences your company's:
 Agility: A flexible structure allows for quicker adaptation to changing
market dynamics and customer needs.
 Innovation: Collaborative structures can encourage the exchange of
ideas and foster a culture of innovation.
 Adaptability: A structure that can evolve with the company's growth
ensures it can handle new challenges and opportunities.
 Culture and Values: The structure shapes the company's culture. For
example, a flat hierarchy often promotes a more participative and
collaborative culture.
Types of Organizational Structures

 Functional Structure:
 Definition and characteristics: Departments are divided based on functions or tasks (e.g.,
marketing, finance).
 Example industries where it is commonly used: Manufacturing, healthcare.
 Divisional Structure:
 Definition and characteristics: Divisions are organized by products, services, or geographic
regions.
 Example of companies using this structure: Procter & Gamble, General Electric.
 Matrix Structure:
 Definition and characteristics: Employees report to multiple managers based on projects
and functions.
 Advantages and disadvantages: Facilitates specialization and flexibility but can lead to
power struggles and confusion.
Types of Organizational Structures
(cont.)
 Network Structure:
 Definition and characteristics: The organization relies on external partnerships and
alliances to accomplish tasks.
 Example organizations: Technology startups, consulting firms.
 Hybrid Structure:
 Definition and when it is used: Combination of two or more organizational
structures.
 Benefits of a hybrid approach: Allows organizations to leverage the advantages of
different structures and adapt to changing needs.
Organogram Overview
 An organogram, also known as an organizational chart, is a powerful tool for visualizing a company's
structure. It's essentially a blueprint that depicts the hierarchy, reporting lines, and roles within the
organization.
Benefits of Using an Organogram:
 Organograms offer a multitude of advantages for both employees and companies:
 Enhanced Transparency: An organogram sheds light on the overall structure, making it easier for
employees to understand how different departments and teams interrelate.
 Improved Communication: By clearly illustrating reporting lines, organograms facilitate communication by
showing employees who to contact for specific information or approvals.
 Streamlined Decision-Making: Understanding the structure empowers employees to make informed
decisions within their area of responsibility.
 Boosted Accountability: A clear visual representation of roles and reporting lines reinforces accountability
within the organization.
Understanding the Purpose of an Organogram:
 An effective organogram serves several key purposes:
 Provides Clarity on Roles and Responsibilities: It eliminates ambiguity by clearly outlining who does what
within the organization.
 Illustrates Reporting Lines: It visually depicts who reports to whom, establishing a clear chain of command.
 Showcases the Hierarchy: It reveals the organizational structure, displaying different levels of
management and teams.
Elements of an Organogram
An organogram, as we discussed, is a visual representation of an organization's
structure. But what exactly makes up this blueprint? Let's break down the key
elements:
 Roles and Responsibilities: This is the foundation of any organogram. It
clearly defines the various positions within the company and outlines the
associated duties and responsibilities for each role. This clarity ensures
everyone understands who does what, preventing confusion and duplication of
efforts.
 Reporting Lines: This element depicts the hierarchy within the organization
by showing who reports to whom. It establishes a clear chain of command,
indicating how information flows and decisions are made. Solid reporting lines
ensure accountability and streamline communication.
 Departments and Divisions: An organogram typically groups related positions
into departments or divisions based on function, product, or geography. This
visual representation helps employees understand how different parts of the
organization work together and how their individual roles contribute to the
bigger picture.
Sample Organogram
Designing an Organogram

 Steps to create an organogram:

 Gather organizational information: Collect data on departments, roles, and
reporting relationships.
 Identify key roles and responsibilities: Determine the core functions and positions
within the organization.
 Determine reporting relationships: Establish who reports to whom and the
hierarchy of authority.
 Design and finalize the organogram: Use software or tools to create a visual
representation of the structure.
 Tools and software for creating organograms: Examples include Lucidchart,
Microsoft Visio, and OrgChart Now.
History

While organizational structures have likely existed since the dawn of complex organizations,
the concept of a visual representation to depict them is a relatively recent invention. Here's a
glimpse into the history of organizational charts:
Pioneers of the Chart:
 The credit for creating the first modern organizational chart goes to Daniel McCallum, a
Scottish-American engineer, in the mid-1850s. He, along with draftsman George Holt
Henshaw, designed a chart to illustrate the structure of the New York and Erie Railroad
Company.
Evolving Terminology:
 Interestingly, the term "organigram" itself is a much later development. It emerged in the
1960s, primarily used in Europe.
The Rise of "Organization Chart":
 In contrast, the term "organization chart" gained traction in the early 20th century and
remains the more prevalent term particularly in North America.
Importance of Organogram in
Professional Practice
Organograms are more than just a fancy chart on the office wall. They play a crucial role in
ensuring a smooth-running and efficient organization. Here's how organograms benefit
professional practice:
 Enhanced Communication and Collaboration:
 A clear picture of roles and reporting lines reduces confusion and fosters better
communication. Employees know who to contact for specific information, approvals, or
collaboration. This eliminates unnecessary back-and-forth and streamlines collaboration across
departments.
 Clarified Roles and Responsibilities:
 An organogram clearly defines what's expected of each position. This eliminates ambiguity and
ensures everyone understands their individual contributions to the team and the organization
as a whole. This clarity empowers employees to take ownership of their tasks and make
informed decisions within their area of responsibility.
 Improved Organizational Efficiency and Decision-Making:
 By outlining reporting lines, organograms facilitate delegation and streamline processes.
Employees know who to report to and who has decision-making authority. This allows for
quicker problem-solving and faster decision-making, ultimately improving overall
organizational efficiency.
Best Practices for Organizational
Structure
 Clear Communication Channels
 What it is: An organizational structure with clear communication channels allows information to
flow freely and efficiently throughout the company. This means employees at all levels understand
who to talk to for specific information, how to report issues, and how to share updates with
colleagues.
 Benefits:
 Improved decision-making: With clear communication, everyone has access to the information they need to
make informed decisions.
 Increased collaboration: Clear communication channels foster teamwork by making it easy for employees to
share ideas and work together on projects.
 Enhanced employee morale: When employees feel informed and involved, they're more likely to be engaged
and satisfied with their work.
 How to achieve it:
 Define roles and responsibilities: Clearly outline who is responsible for communicating what information to
whom.
 Utilize multiple communication channels: Emphasize a mix of methods like email, instant messaging platforms,
video conferencing, and in-person meetings to cater to different preferences.
 Encourage open communication: Foster a culture where employees feel comfortable asking questions, sharing
ideas, and raising concerns.
Best Practices for Organizational
Structure
 Regular Updates and Revisions
 What it is: An organizational structure is not static. As your company grows, evolves, or faces
changes, your structure needs to adapt as well. This means regularly reviewing and updating the
organogram (a visual representation of the company structure) to reflect these changes.
 Benefits:
 Improved efficiency: An up-to-date structure ensures that everyone knows who to report to and who is
responsible for what tasks. This reduces confusion and wasted time.
 Increased agility: A flexible structure allows the company to respond quickly to changes in the market or
industry.
 Enhanced employee engagement: Regular updates demonstrate that the company is responsive to employee
needs and feedback.
 How to achieve it:
 Schedule regular reviews: Set a specific timeframe, like quarterly or annually, to review the organogram and
identify necessary adjustments.
 Gather input: Seek feedback from employees at all levels to understand how the current structure is working
and where improvements can be made.
 Be transparent about changes: Communicate any changes to the structure clearly and concisely to all
employees.
Best Practices for Organizational
Structure
 Alignment with Company Goals and Strategy
 What it is: An effective organizational structure should be designed to support the company's
overall goals and strategy. This means that the structure should be organized in a way that
facilitates achieving the company's mission and vision.
 Benefits:
 Increased focus: A well-aligned structure helps everyone in the company understand how their individual role
contributes to the company's success.
 Improved resource allocation: Resources, such as personnel and budget, can be allocated more effectively to
support strategic initiatives.
 Enhanced performance: A structure that aligns with the company's goals is more likely to lead to improved
performance and achievement of objectives.
 How to achieve it:
 Define your company goals and strategy: Start by clearly outlining the company's mission, vision, and strategic
objectives.
 Align structure with goals: Structure your teams and departments in a way that supports achieving those goals.
For instance, if innovation is a key strategic focus, consider creating a dedicated team for research and
development.
 Monitor and adjust: Continuously monitor how well your structure aligns with your goals and make adjustments
as needed.
Challenges in Organizational Structure
 Common Challenges:
 Scalability Issues:
 Description: As a company grows, its current structure may struggle to keep pace.
Rigid hierarchies can become bottlenecks, hindering decision-making and slowing
down processes.
 Example: Imagine a small marketing team structured with a single manager
overseeing all tasks. As the company expands and marketing needs become more
complex, this structure might not be scalable, leading to overwhelmed employees
and missed deadlines.
 Communication Breakdowns:
 Description: When information flow is hampered by unclear communication
channels or departmental silos, employees lack the information they need to do
their jobs effectively. This can lead to confusion, duplication of work, and missed
opportunities.
 Example: The sales team might be unaware of new product features developed by
the engineering team, leading to inaccurate presentations to clients.
Challenges in Organizational Structure
 Common Challenges:
 Resistance to Change:
 Description: People naturally resist change, especially when it disrupts their
routines or comfort zones. This can make implementing a new organizational
structure difficult, even if it's ultimately beneficial.
 Example: Employees accustomed to working independently might resist the
creation of cross-functional teams, fearing a loss of autonomy or control.
 Silo Mentality:
 Description: Silo mentality occurs when departments become isolated and focused
solely on their own objectives, neglecting collaboration and information sharing
with other departments. This can hinder overall organizational effectiveness.
 Example: The design team might prioritize aesthetics over functionality, leading to
clashes with the engineering team focused on production feasibility.
Strategies for Overcoming Challenges:

 Regular Communication:
 Description: Foster open and transparent communication across all levels. Utilize
various communication channels like meetings, company-wide announcements, and
internal communication platforms. Encourage a culture of active listening and
feedback exchange.
 Training and Development:
 Description: Provide training programs to help employees understand the new
structure, their roles within it, and the benefits of change. Equip them with the
skills and knowledge to collaborate effectively in a team environment.
 Organizational Restructuring:
 Description: If necessary, consider restructuring your organization to better align
with your goals. This could involve creating new departments, consolidating existing
ones, or implementing a flatter hierarchy.
Conclusion

 Organizational structure defines how roles, responsibilities, and reporting

relationships are arranged in an organization.
 Various types of structures include functional, divisional, matrix, network, and
hybrid structures.
 Organograms are visual tools that clarify organizational structure, roles, and
communication lines.
 Best practices for organizational structure include clear communication channels,
regular updates, and alignment with company goals.
 Importance of Organizational Structure in Professional Practice:
 A well-defined structure enhances efficiency, accountability, and collaboration within an
organization.
 Helps in achieving strategic goals, improving employee performance, and fostering a
positive organizational culture.