Organizational structure affects employee morale, communication, efficiency, and effectiveness. A well-planned structure can improve performance, while a poorly organized one can lead to negative effects. Balancing flexibility and a clear chain of command is important for communication, and streamlining chains of command can improve efficiency. Regular review and adaptation can help a company achieve its effectiveness goals.
The effects of organizational structure can extend to almost any type of measurable performance. A well-planned and easily adaptable structure can help a business thrive in many areas, creating a chain reaction of mutual support and improvement. Some of the most important effects of organizational structure can be seen in employee morale, internal communications, efficiency and effectiveness.
Employee morale is often based on a solid organizational structure. Employees tend to feel motivated and loyal when they are treated with respect, challenged by their jobs, and have access to opportunities for advancement. The effects of organizational structure on employee morale can also be negative; If, for example, an organization routinely awards department heads with raises and bonuses while freezing junior employee wages, lower-level employees can quickly become disenchanted with the job. Because part of organizational structure determines how incentive programs, discipline, and progress are managed, how an organization is organized can play a very real role in morale.
How employees and departments can communicate is another of the most important effects of organizational structure. In a tightly structured and highly segregated environment, employees may not be able to access the information or personnel needed to perform a task. Conversely, an organization that is too lax can lead to a vague chain of command, meaning employees may not be able to figure out who they should talk to about a project or concern. Balancing the need for flexibility across departments with the importance of a clear chain of command is an important part of organizational structure.
Efficiency in the organization refers to the amount of work required to achieve performance goals. If an organization is structured efficiently, work will be productive and useful, with little waste. The effects of organizational structure on efficiency can be enormous, as a poorly organized system can slow down work in nearly every area of a business. An example of an organizational structure that leads to inefficiency might be an employee who has to go through seven levels of bosses and supervisors to get approval for a task, her work might stagnate for hours, if not days, waiting for approval . The process of adapting the structure for efficiency usually involves simplifying or streamlining the chains of command.
The goal of most organizations is effectiveness in all areas including employee relations, efficiency, sales and marketing. The organizational structure is often referred to as the “skeleton” of a company, which can help or hinder the achievement of effectiveness. One of the ways the facility can influence effectiveness is by engaging in a review process that tests expectations against actual performance. By creating an organizational structure that can review and adapt, a company can continually advance toward achieving its effectiveness goals.
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