Introduction Once the decision has been made to begin a retail venture, it is necessary to plan its organizational structure

in a way that maximizes efficiency and profitability. All of the duties and responsibilities of those in the company must be identified, and lines of authority must be carefully delineated so that all members of the organization will understand what their job responsibilities are. By doing so, everyone knows who will report to whom, who the decisionmakers are, and which advisory personnel is on hand to assist in the decision-making process. No matter how large or small the operation, whether it is a major department store or single-unit boutique, each company must be structured in such a way that best serves its needs and makes the business a success. To clarify their organizations structure so that all employees can understand it, most companies prepare a graphic presentation called an organization chart. The chart clearly spells out the various divisions of the company, the roles they play, lines of responsibility and authority, decision-making positions, advisory roles (if there are any in the organization), and areas of responsibility. Such charts allow employees at any level of the organization to immediately learn their place in the company, to whom they are responsible, and, in turn, their own paths of responsibility. Each retail classification has certain traditional organizational structures. Department stores structures, for example, are somewhat dissimilar from those of the chain organizations, as are small retail operations from their giant counterparts. Each company tailors a chart that best suits its specific needs. Often, companies undergo structural changes that fit their needs to address any new directions they take. Most department stores, for example, at one time exclusively brick-and-mortar operations, are now engaged in multichannel retailing that necessitates placing their catalog and E-tail divisions on the organizational chart. As small companies develop into larger ones, and as the giants expand their operations globally, their organizational structures must be adapted to fit their latest needs.

Meaning of Organisation: Organisation is the foundation upon which the whole structure of management is built. Organisation is related with developing a frame work where the total work is divided into manageable components in order to facilitate the achievement of objectives or goals. Thus, organisation is the structure or mechanism (machinery) that enables living things to

work together. In a static sense, an organisation is a structure or machinery manned by group of individuals who are working together towards a common goal. Alike 'management', the term 'organisation' has also been used in a number of ways. broadly speaking, the term 'organisation' is used in four different senses: as a process, as a structure of relationship, as a group of persons Meaning of organization stucuture An organizational structure consists of activities such as task allocation, coordination and supervision, which are directed towards the achievement of organizational aims.[1] It can also be considered as the viewing glass or perspective through which individuals see their organization and its environment.[2] Organizations are a variant of clustered entities.[citation needed] An organization can be structured in many different ways, depending on their objectives. The structure of an organization will determine the modes in which it operates and performs. Organizational structure allows the expressed allocation of responsibilities for different functions and processes to different entities such as the branch, department, workgroup and individual. Organizational structure affects organizational action in two big ways. First, it provides the foundation on which standard operating procedures and routines rest. Second, it determines which individuals get to participate in which decision-making processes, and thus to what extent their views shape the organizations actions.[2] Definition The typically hierarchical arrangement of lines of authority, communications, rights and duties of an organization. Organizational structure determines how the roles, power and responsibilities are assigned, controlled, and coordinated, and how information flows between the different levels of management. A structure depends on the organization's objectives and strategy. In a centralized structure, the top layer of management has most of the decision making power and has tight control over departments and divisions. In a decentralized structure, the decision making power is distributed and the departments and divisions may have different degrees of independence. A company such as Proctor & Gamble that sells multiple products may organize their structure so that groups are divided according to each product and depending on geographical area as well.

Organizational Structure Types

Following are the types of organizational structures that can be observed in the modern business organizations.

Bureaucratic Structures
Bureaucratic structures maintain strict hierarchies when it comes to people management. There are three types of bureaucratic structures:

Pre-bureaucratic structures
This type of organizations lacks the standards. Usually this type of structures can be observed in small scale, start-up companies. Usually the structure is centralized and there is only one key decision maker. The communication is done in one-on-one conversations. This type of structures is quite helpful for small organizations due to the fact that the founder has the full control over all the decisions and operations.

Bureaucratic structures
These structures have a certain degree of standardization. When the organizations grow complex and large, bureaucratic structures are required for management. These structures are quite suitable for tall organizations.

Post-bureaucratic structures
The organizations that follow post- bureaucratic structures still inherit the strict hierarchies, but open to more modern ideas and methodologies. They follow techniques such as total quality management (TQM), culture management etc.

Functional Structure
The organization is divided into segments based on the functions when managing. This allows the organization to enhance the efficiencies of these functional groups. As an example, take a software company. Software engineers will only staff the entire software development department. This way, management of this functional group becomes easy and effective. Functional structures appear to be successful in large organization that produces high volumes of products at low costs. The low cost can be achieved by such companies due to the efficiencies within functional groups. In addition to such advantages, there can be disadvantage from an organizational perspective if the communication between the functional groups is not effective. In this case, organization may find it difficult to achieve some organizational objectives at the end.

Divisional Structure
These types of organizations divide the functional areas of the organization to divisions. Each division is quipped with its own resources in order to function independently. There can be many bases to define divisions. divisions can be defined based on the geographical basis, products / services basis, or any other measurement. As an example, take a company such as General Electrics. It can have microwave division, turbine division, etc., and these divisions have their own marketing teams, finance teams etc. In that sense, each division can be considered as a micro-company with the main organization.

Matrix Structure
When it comes to matrix structure, the organization places the employees based on the function and the product. The matrix structure gives the best of the both worlds of functional and divisional structures.

In this type of an organization, the company uses teams to complete tasks. The teams are formed based on the functions they belong to (ex: software engineers) and product they involved in (ex: Project A). This way, there are many teams in this organization such as software engineers of project A, software engineers of project B, QA engineers of project A, etc.

The Importance of a Good Organizational Structure

Businesses require structure to grow and be profitable. Designing an organization structure helps top management identify talent that needs to be added to the company. Planning the structure ensures there are enough human resources within the company to accomplish the goals set forth in the companys annual plan. It is also important that responsibilities are clearly defined. Each person has a job description that outlines duties, and each job occupies its own position on the company organization chart. Sponsored Link China imports Meet 950+ Suppliers In Hong Kong Int'L Lighting Fair 2013. 6-9 Apr www.hktdc.com

Communication
The flow of information is essential to an organizations success. The organization structure should be designed to ensure that individuals and departments that need to coordinate their efforts have lines of communication that are built into the structure. The financial planning and analysis department might report to the Chief Financial Officer

and the Senior Vice President of Marketing, because both of these members of the top management team depend on information and reports provided by financial planning.

Reporting Relationships
Reporting relationships must be clear so all members of the organization understand what their responsibilities are and know to whom they are accountable. These clear relationships make it easier for managers to supervise those in lower organization levels. Each employee benefits by knowing whom they can turn to for direction or help. In addition, managers are aware of who is outside the scope of their authority, so they do not overstep their bounds and interfere with another managers responsibilities.

Growth And Expansion

Companies that grow rapidly are those that make the best use of their resources, including management talent. A sound organization structure ensures that the company has the right people in the right positions. The structure may suggest weak spots or deficiencies in the companys current management team. As the company grows, the organization structure must evolve with it. Many times more layers of management are created, when one department head has too many individuals reporting to him at one time to give each employee the attention and direction needed for the employee to succeed.

Task Completion
A well-designed organization structure facilitates the completion of projects. Project managers can better identify the human resources available to them if the scope of each departments responsibility -- and each team members capabilities--are clear. A project to develop a new product would require market research. The project manager needs to know who in the organization can provide this research, and whose permission must be obtained for the research to be done.

Fits Companys Needs

Companies in different industries require different mixes of talent and a relatively greater emphasis on certain management functions. A software company often has a large development staff. Structuring the reporting relationships within the development team so creativity and productivity are maximized, and deadlines are met, is vital to that type of companys success. Companies often have to go through a reorganization phase in which individual positions or even whole departments are repositioned on the organization chart in an effort to better utilize the companys human resources and make the operation run more smoothly.

What Can Go Wrong

Poorly structured organizations find that critical deadlines are not met because there were not sufficient human resources in each department to accomplish all parts of a given task, or because it was not clear whose ultimate responsibility the project was. If individuals are not sure whom they report to, they may find they are given conflicting assignments by two or more managers above them. Elements of Efficient Organizational Structure
An efficient organizational structure can help your business operate and grow in a manner that you can better manage. Efficient structure produces communication that is consistent within the company, a uniform marketing message and a culture that helps encourage cohesiveness and good morale. To achieve this sort of alignment, you first must understand the elements of efficient organizational structure.

Employee Morale
High morale holds an organizational structure together. With high morale, productivity is elevated, and employees offer new ideas to help increase efficiency. Create incentive plans that offer pay to individuals who perform above expectations. Constantly compare the salaries and pay structures you are offering with other companies in your industry to remain competitive and encourage employee feedback on company issues. Try to hold company gatherings at least once a quarter, and maintain a culture of encouragement and growth that will inspire employees and garner employee loyalty.

Communication
The structure of an organization is efficient only if it encourages clear communication across company lines, according to the Free Management Library. Departments must be able to speak to each other to ensure that day-to-day operations go smoothly. Employees

must feel as though they can speak to managers to help employee development and to help resolve conflict. Managers need to have access to the executive team for clarification on important company policies and issues.

Decision Making
Decision makers at all levels need to be clearly identified, according the Bridgespan Group business consultants. More important issues may need the president or chief executive's approval, such as major vendor decisions or product concerns. Managers at all levels need authority to make decisions on issues that directly affect their departments or groups. A well-defined escalation policy can efficiently move issues up to higher levels of management, if necessary.

The Advantages of an Organizational Structure The Advantages of an Organizational Structure

An organizational structure is the framework that helps employees achieve their goals and do their jobs, according to Lamar University. An efficient company structure can benefit the organization in several ways, including making it easier to delegate responsibility and effect change throughout the organization. To benefit from a strong framework, it is important to understand the advantages of organizational structure.

Unified Marketing Message

A company can present a unified front to customers, vendors and investors when a common marketing message is used throughout the organization. A unified marketing message can help the entire company better understand its marketing goals, and then work together to achieve them. When multiple departments are involved in a single endeavor, a unified marketing message can be essential to project success.

Succession
A strong organizational structure is better able to prepare qualified employees for management. When the company operates under a strong structure, a comprehensive management training plan is easier to create and execute to help maintain a strong managerial core. Departments can work together on a developmental plan to help encourage the training of managerial candidates within any department.

Focus on Strategy

Using a strong organizational structure allows a company to better focus on a single set of goals instead of each group working towards its own agenda, according to Family Business Experts. This is the result of the flow of communication an organizational structure offers, as well as the establishment of responsibility and respect for the company hierarchy that comes from strong structure. It helps the company to use resources wisely in the pursuit of company goals as opposed to doubling efforts or experimenting with options perhaps not in the company's best interests.

Training
A good organizational structure makes employee training easier to administer, and it also allows it to remain flexible based on the changes within the organization. When organizational structure regulates the flow of information, then changes within that information are easier to monitor and better adaptable for a company-wide training program.

Decision Making
An organizational structure can make decision making a more efficient process, according to Lamar University. When a defined hierarchy is in place, the company is better equipped to make important decisions and adjust practices to meet the demands of competition.

Problems Within an Organizational Structure

A company with a strong organizational structure benefits from improved communication, a well-defined hierarchy and the ability to create a unified company message. As efficient as organizational structure can be, it can also create problems that can lead to loss of productivity and internal conflict. In order to maintain a strong company framework, you need to be able to identify the problems within an organizational structure and deal with them as they occur.

Departmental Loyalty
One of the dangers of creating departments is the appearance of an "us versus them" mentality between different groups. Sales may feel in conflict with accounting because new customers are not getting approved for credit terms. Logistics is at odds with manufacturing because products are not being built fast enough to meet shipping deadlines. Departments tend to get competitive and feel that their work is more important to the success of the company than the work of the other groups. This can cause breaks in communication that affect productivity.

New Management

If there have not been changes in management for many years, then the company will start to settle into a way of doing things that is efficient and comfortable for the existing management team. Changes in management, for whatever reason, can put strain on the organizational structure of an organization. The new manager, or managers, may be unfamiliar with the way the organizational structure has been run for years and try to put a new spin on how things should be run. There is an adjustment period for employees and other managers.

Confusion
Effective communication is required to keep an organizational structure running smoothly. Without communication, new ideas and processes can get confused. Managers may begin to redouble efforts in an attempt to claim certain parts of a process as their own. This is why executive communication to the rest of the company is critical to the success of any organizational structure. If departments are not clear on exactly what their responsibilities are, then the ensuing confusion can slow production down.

Company Goals
An organizational structure is only effective when the entire company uses it properly, according to management consultants Liebowitz and Associates. When upper management creates departmental goals for the rest of the company without first consulting with the managers of those departments, the company runs the risk of not making its goals. In order for an organizational structure to be effective, goal-making needs to be a two-way process. When upper management does not seek the input of the rest of the company to create company goals, then resentment can set in and morale begins to drop.

Examples of Poor Organizational Structure in Companies

Defining the organizational structure of any company, which includes the different roles, how they interact and how things get accomplished, is crucial to success. The best staff, products and marketing cannot benefit a business if the company is not organized in such a way to capitalize on these strengths. Poor organizational structure can kill off companies that otherwise deserve to be successful and profitable. Sponsored Link

Steep Hierarchies
Almost every company has a hierarchy in which orders are given and received. However, problems can arise if the chain of command gets too steep and the top echelon does not interact with the workers on a regular basis. Immediate supervisors often are the only managers who understand the jobs of their staff in detail. For example, a CEO should not be giving orders to floor workers without any dialogue or understanding of what the job

entails; she instead should approach the supervisor. Steep hierarchies can lead to miscommunication because workers focus on pleasing the bosses rather than on their own performances. Bosses also too often assume that they are always right. A less dramatic hierarchy can allow for orders to be appropriately adapted to circumstances at each level.

Role Confusion
Where roles are not clearly defined, confusion is almost inevitable and can create wasteful redundancies and contradictions. Role confusion can paralyze a company or, at the very least, waste resources and cut into profits. For example, three different employees taking responsibility for a similar project would result in a tripling of the cost of that project, not to mention other important work that is neglected because of the redundant work being done. Another example of role confusion is when two or more people who have authority over the same group of employees give contradictory orders to the team. This can lead to a standstill in productivity.

Procedural Issues
Companies often have procedural guidelines or rules in place that slow productivity and create confusion. Sometimes, this results from not reevaluating outdated methods. The handbook for certain procedures may be old, written by someone who was out of touch with the company's values or written to accommodate laws and technology that since have changed. Overregulation and messy procedural guidelines can drastically reduce productivity and even can stop important company initiatives from taking place at all. Procedural murkiness can turn a lively, dynamic and creative company into a crippled bureaucratic nightmare.

Lack of Coherence
In order for a company to function, the individual parts need to be working toward the same goal. One good way to cultivate coherent operation is to have a clearly articulated mission statement. Each department should be run on the basis of the mission statement and the goals of the company as a whole, never toward its own objectives. Without singleness of purpose, even a powerhouse company essentially can cancel out its own efforts. Imagine a huge industrial company that spends half its resources building cars and the other half scrapping the same cars. Even though a lot is going on, lack of coherence makes it a zero sum game and a failing company. Sponsored Links

Organizational Structure & Effectiveness

A company can start out by using one of several organizational structures. However, companies can sometimes increase their effectiveness using multiple organizational structures. Other companies may switch from one type of organizational structure to another to be more effective. The decision for organizational structure usually lies with

top management. The size of a company is sometimes the determining factor as to organizational structure effectiveness.

Significance
Larger companies often benefit from a taller organizational structure. A tall organizational structure contains lots of management levels. Decision makers dole out tasks and projects in which they hold subordinates accountable. Upper management knows what strategies the wish to implement and, subsequently, get all subordinates working together to effectively meet company goals. Contrarily, small companies will often use flat organizational structures. It is more effective for smaller companies to complete task and projects without waiting on decisions from multiple managers. A flat structure is often more effective in completing tasks and projects faster. Small companies are often in a rapid growth state. Company owners and employees must make quick decisions.

Types of Structures
Some companies may feel a product organizational structure is most effective for their needs. For example, department stores are heavily focused on various product-oriented departments. Executives often hold titles such as vice president of housewares or vice president of sporting good. A product organization structure may work best for department stores because product expertise is required to effectively manage specific departments. For example, the buying process may vary by type of product. In addition, managers in certain departments may be more experienced in terminology related to their special products Contrarily, a company may deem a functional organizational structure works best for them. Departments that are divided by functional areas, including marketing and engineering, may be more effective in grouping people of special talents together, according to HRMguide.com. For example, a marketing team will often be much more effective working together when testing a new product concept.

Customers
Some companies may deal with a diverse group of customers. For example, a software company that sets up electronic bill-paying may target consumers, banks, corporations and health clubs. Consequently, the software company may organize its structure by customer type. Organizing by customer type may be more effective than other organizational structures because the products and procedures may vary greatly among customer type.

Benefits
The benefits that companies wish to achieve with various organizational structures include increased communication, efficient use of resources and even chain of command. For example, a company will usually develop an organizational structure that facilitates communication through various management levels. That way timely decisions can be made by the right individuals. Companies also want to make efficient use of resources and avoid any duplication of efforts. Therefore, these companies create their

organizational structures accordingly. Companies that can eliminate duplication resources, including labor or raw materials, tend to operate more effectively.

Considerations
Some companies may need to decentralize their organizational structure geographically. For example, a company that relies heavily on direct sales may need to decentralize its sales and marketing functions by region. Consumer product companies sometimes decentralize sales and marketing functions because consumer tastes vary per region. A geographically decentralized organizational structure can also be more effective because production facilities are spread out. Consequently, a production facility in Ohio would likely get products to Kentucky quicker than one in California.

What Are the Tasks of Organizational Structure?

An organizational structure is a formal system of job duties and hierarchy. It defines the responsibilities of each position and the relationships between them. An effective structure controls and coordinates the business' resources and motivates employees to achieve its goals. When developing your structure, consider the five responsibilities of an organizational structure.

Distribute Authority
Organizational structure establishes a chain of command determining each position's responsibilities and relationships to others. Authority can be centralized, where managers or supervisors make the majority of decisions, or decentralized, which includes many positions in the decision-making process.

Determine the Span of Control

How many employees each manager surpervises is also part of an organizational structure. The span of control can vary greatly between organizations, even between different levels of the same organization. A narrow span of control means managers only supervise a few employees while those who manage a large number of employees wield a wide span of control.

Organizational Height
An important characteristic of organizational structure is its height, the amount of layers from bottom to top. Tall organizations have many layers, with each working like a cog in a complex machine. They tend to have a narrow span of control. Flat organizations, which usually have a wide span of control, have few layers and are capable of adapting quickly.

Line or Staff Structure

Determining and highlighting line and staff positions is part of an organizational structure. Line positions are those directly involved in the organization's primary purpose. In a manufacturing company, for example, line positions participate in the production of its goods. Staff positions, such as marketing, provide support to the line positions. While some organizations are comprised exclusively of line positions, most use both line and staff positions.

Create Departments
As organizations grow, it becomes necessary to divide tasks and responsibilities. This process, known as departmentalizing, can be carried out in a variety of ways. Departments can be created based on function, product, geographic location, or even by custom

Conclusion
Every organization needs a structure in order to operate systematically. The organizational structures can be used by any organization if the structure fits into the nature and the maturity of the organization. In most cases, organizations evolve through structures when they progress through and enhance their processes and manpower. One company may start as a pre-bureaucratic company and may evolve up to a matrix organization.