Have you walked into a firm or a company before and the attendant walked you to the person who is to attend to your issues? Though any available person could have easily attended to you instead of going through the process of meeting who to attend to you. The reason for this is because of the rules and regulations guiding the company. These rules are embedded in the organization structure.
Organization structure is a system outlining how the organization carries out its activities. These activities include the rules, obligations, and principles guiding the organization. The essence of the organizational structure in any company is targeted at achieving the company’s goals. Beyond this, organization structure guides how information flows in the company.
Depending on the type of structure the organization is operating, information might flow from the top to the lower category, or circulate without following any order. Notwithstanding organizational structure helps to keep the company organized and focused. It defines each employee’s role and who to report to. Organizational structure is prevalent in every aspect of the company. Below are the two broad classes of organizational structure
- Centralized
- Decentralized
Centralized organization structure
Centralized organization structure is most commonly in companies or organizations. This type of organization structure places emphasis on level and hierarchy, as such, companies that practice this operate the hierarchical method of relation. Centralized organization structure is prevalent in the military as individuals in the force relate with one another based on their rank or hierarchy. One of the importance of centralized organization structure is that it spells out the role of each individual in the business.
Decentralized system of organization structure
Decentralized organization structure does not hold on tenaciously to the principle of hierarchy. A good example of companies that operate this kind of structure is technology companies. Although some companies that operate decentralized systems of organization structure like Johnson & Johnson still follow hierarchical principles, these companies are more adaptable to change than centralized companies.
Notwithstanding having a good organizational structure is paramount to the success of any organization. This is because, as stated earlier, organizational structure controls every aspect of the company. It directly or indirectly dictates how employees should relate with one another
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