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The Importance of a Organizational

By Joshua Wallace
eHow Contributor



12 Found This Helpful

The importance of an organizational structure involves assisting business owners, CEOs, and
entrepreneurs to conceptualize, visualize, and construct a hierarchical system to be implemented
into their organization. For example, the building blocks of an organizational structure include: a
chain of command, span of control, departmentalization, distribution of authority, and
organization height.

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What is the Purpose of Organizational Structure?

The Importance of Good Structure in an Organization

1. Chain of Command
o An organizational structure involves a chain of command which determines and
defines: job positions, who makes the decisions, and who's accountable for
various duties.

Span of Control

o Span of control determines and quantifies the actual amount of employees a

manager supervises.
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o Departments within an organization structure are sections of the structure divided
into functional divisions (such as the Sales Department) relevant to specific tasks.
Determining what activities, tasks, and talents are to be grouped to best achieve
an origination's objective is called the departmentalization process.

Distribution of Authority
o Distribution of authority determines if decision-making authority is concentrated
among a few high-level figures commonly seen in bureaucratic organizations or is
the authority shared and distributed throughout a variety of departments working
closet to the their corresponding tasks.

Organization Height
o Organization height defines how many departments, divisions, and layers there
are between the highest levels and the lowest levels of an organization.

What is the Purpose of Organizational

By Joshua Wallace
eHow Contributor



13 Found This Helpful

The purpose of an organizational structure is to define the guidelines, parameters and the
procedural process necessary for a group to accomplish a main objective. For example, the
anatomy of an organizational structure is further reduced to the distribution of authority, span-ofcontrol, line vs. staff structures, organizational height and departmentalization.
An organizational structure organizes priorities hierarchically by means of identifying tasks
critical to a group realizing an end goal.

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Types of Organization Structures & Their Relevance

What Is the Purpose of an Organizational Chart?

1. Distribution of Authority
o Determining how an organizational structure distributes tasks to accomplish a
main objective involves identifying if the structure will adopt a decentralized
strategy where significant potions of the decision-making process involves subordinates and the managerial staff across many levels of the structure or both or if
the structure will adopt a centralized strategy where the majority of decisionmaking is made from the top-down.

o Span-of-control portion of an organizational structure defines the amount of
employees an authority figure is responsible for. According to,
the span-of-control is expressed one of two ways: a wide span of control where
managers supervise many employees; a narrow span of control where managers
supervise few employees.
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Line vs. Staff Structures

o An organizational structure may adopt a live structure or a staff structure or both
to achieve their main objectives. A line structure, sometimes called a product
structure, identifies the activities directly responsible for the organization's main
goal, such as the labor involved in making an actually product. A staff structure is
the support staff or network assisting the line structures in their goals.

Organizational Height
o Organizational height defines how many levels or layers from the decision makers
and down there are. Organizational height is expressed as tall organizations with
many levels or flat organizations with few levels.

o It's critical for an organizational structure to determine, categorize, and organize
the variety of tasks to be accomplished when achieving a main goal and decide
how to separate specific tasks from others. This involves departmentalizing tasks,
resulting in the formation of departments and divisions within an organizational

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The Importance of Good Structure in an

By George N. Root III
eHow Contributor





Effective management means creating an efficient chain of command.

A company with a strong organizational structure is a company that has a defined way of dealing
with issues and focusing growth. Without good structure in an organization, the company could
send a confusing message to clients and employees.

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Organizational Structure of Essays

What is the Purpose of Organizational Structure?

1. Identification
o Structure within an organization is a defined chain of command for each
department and within the entire company. It is also a clearly outlined set of
policies that dictate how the company does business.

o A company with effective structure from the very beginning can outline a growth
path and focus on following that path. Without structure, departments could begin
to make their own rules that run counter to the goals of the company. This can
stunt company growth and create marketplace confusion.
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o A strong organizational structure instills confidence in customers and vendors.
This can increase the customer's desire to do business and the vendor's ability to
negotiate pricing that better suits the company.

o Organizational structure means all employees know how to address company
issues and problems. This increases productivity and adds money to the company
bottom line.

o Effective managers and executives can work to improve the company through
good organizational structure. Good structure means efficient communication, and
new ideas are implemented easier when there is good communication.

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The organization chart is a diagram showing graphically the relation of one official to another, or
others, of a company. It is also used to show the relation of one department to another, or others,
or of one function of an organization to another, or others. This chart is valuable in that it enables
one to visualize a complete organization, by means of the picture it presents.[1]
A company's organizational chart typically illustrates relations between people within an
organization. Such relations might include managers to sub-workers, directors to managing
directors, chief executive officer to various departments, and so forth. When an organization
chart grows too large it can be split into smaller charts for separate departments within the
organization. The different types of organization charts include:



Flat (also known as Horizontal)

There is no accepted form for making organization charts other than putting the principal official,
department or function first, or at the head of the sheet, and the others below, in the order of their
rank. The titles of officials and sometimes their names are enclosed in boxes or circles. Lines are
generally drawn from one box or circle to another to show the relation of one official or
department to the others.[1]


Organization Chart of Tabulating Machine Co., 1917

The Scottish-American engineer Daniel McCallum (18151878) is credited for creating the first
organizational charts of American business[2] around 1854.[3][4] This chart was drawn by George
Holt Henshaw.[5]
The term "organization chart" came into use in the early twentieth century. In 1914 Brinton[6]
declared "organization charts are not nearly so widely used as they should be. As organization
charts are an excellent example of the division of a total into its components, a number of
examples are given here in the hope that the presentation of organization charts in convenient
form will lead to their more widespread use." In those years industrial engineers promoted the
use of organization charts.
In the 1920s a survey revealed that organizational charts were still not common among ordinary
business concerns, but they were beginning to find their way into administrative and business
The term "organigram" originates in the 1960s.[8]

There are several limitations of organizational charts:

If updated manually, organizational charts can very quickly become out-of-date,

especially in large organizations that change their staff regularly.

They only show "formal relationships" and tell nothing of the pattern of human (social)
relationships which develop. They also often do not show horizontal relationships.

They provide little information about the managerial style adopted (e.g. "autocratic",
"democratic" or an intermediate style)

In some cases, an organigraph may be more appropriate, particularly if one wants to show
non-linear, non-hierarchical relationships in an organization.

They often do not include customers.


A military example chart for explanation purposes.

The example on the right shows a simple hierarchical organizational chart.
An example of a "line relationship" (or chain of command in military relationships) in this chart
would be between the general and the two colonels - the colonels are directly responsible to the
An example of a "lateral relationship" in this chart would be between "Captain A", and "Captain
B" who both work on level and both report to the "Colonel B".
Various shapes such as rectangles, squares, triangles, circles can be used to indicate different
roles. Color can be used both for shape borders and connection lines to indicate differences in
authority and responsibility, and possibly formal, advisory and informal links between people. A
department or position yet to be created or currently vacant might be shown as a shape with a
dotted outline. Importance of the position may be shown both with a change in size of the shape
in addition to its vertical placement on the chart.