The idea of structures in an organization is also a fundamental one. It is characterized by an activity-authority relationship in an enterprise. Organization as a structure is a consciously conceived and created pattern of tasks, roles, and relationships among individual members of a group towards the accomplishment of its objectives. This pattern or network may be exhibited by way of an organization chart.
The organization structure is not an end in itself, it is rather a means to an end. It is created to achieve certain goals, and organizing, in turn, is done to accomplish those objectives. Peter F. Drucker also views the organization as a means to the end of business performance and results.
Purpose and Cause of Organising
It needs to be emphasized that structure is a means, not an end in itself. As such not only should it facilitate the achievement of enterprise objectives through orderly organized group effort but it should also do the same with the least cost in terms of time, money, effort, and pain. Thus, strictly speaking, the structure does not have objectives of its own, rather it is a manifestation of enterprise objectives in terms of those attributable to the specific tasks, roles, and relationships.
The basic cause of organization structure lies in the limitations of the span of management. If there were no such limitations, one could have an organized enterprise with only one manager. The number of subordinates a manager can effectively manage maybe a few or many depending upon one’s ability, the requirements of the job to be done, and the basic factors that influence time demands.
Dynamic Organisation Structure
The organizational structure should not be static. An enterprise operates under a highly dynamic environment where the technological, social, political, and economic setting in which it operates and the people managing the organization are continually in flux. This calls for adapting the organization’s structure to changing conditions so that it can survive and grow. A change in economic function generally calls for redesigning the organization structure. Intense competition may require profit decentralization and the provision of better service to the people. Economic considerations may favor vertical disintegration of the particular process. Such changes in economic functions influence the organization structure largely through interchanging the jobs. Accommodating these changes in the organization require that the structure should be partly modified.
Developing an Organisation Structure
Designing a new organizational structure or reorganizing an existing one calls for careful consideration of current practices and principles of the organization. There are, however, no such rules the application of which will lead to the best organizational structure in every situation. But the following steps can be of great help in designing a suitable structure that will help in achieving enterprise objectives.
(i) Clear Definition of Objectives: The first step in developing an organizational structure is to lay down its objectives in very clear terms. This will help determine the type, stability, and basic characteristics of the organization. In fact, organization activities are detailed in terms of objectives to be achieved.
(ii) Identifying the Activities and Grouping them into Convenient Classes: The next important step in developing an organization structure is an enumeration of activities necessary to achieve the objectives, their grouping in a systematic manner, assignment of such groups of activities to personnel, and providing for their coordination. Wherever possible, similar functions should be combined into one position.
(iii) Determine the Structure: The first two steps outlined above set the stage for actual determination of the organization structure. More specifically, the organizer has to decide about the span of supervision, types of organization, the basis of departmentation, and the pattern of authority structure.
(iv) Revise the Structure on the Basis of Assessment of Personnel and Other Resources: The last step in developing a suitable organizational structure is to assess the capacities and abilities of the people available to man the different positions in the organization along with other resources at the disposal of the enterprise. The ideal organization should then be adapted to fit the reality of the situation.