In today's dynamic and rapidly evolving business environment, organisational structure plays a key role in its overall success. An effective organisational structure decides how tasks will be allocated and determines the flow of information and the decision-making process.
One system that plays a key role in this process is the organisational structure. But what is organisational structure? In simple terms, it refers to the system that outlines how different activities are managed within an organisation. The idea here is to create a functional system that drives the company to its ultimate goal.
What Is Organisational Structure?
An organisational structure is how a company, organisation, or business is built. It defines the job titles, roles, and responsibilities within a company. Moreover, it also includes who makes decisions about what matters and who reports to which person. In short, it determines the firm's hierarchy, the flow of information, and the job role of each person within the business.
You can also interpret organisational structure as being all about decision-making, resource allocation, and prioritising workflows.
Critical Factors for Creating an Organisational Structure
Now that you know what is organisation structure, let’s understand the crucial factors that create this system –
- Work Specialisation
Work specialisations are known as job descriptions. The job description reveals an employee's responsibilities within a team or an organisation. A transparent work specialisation helps you to hire the right talent and allocate the best resources for a job.
- Centralisation And Decentralisation
The centralisation approach indicates how much influence the upper-level leaders have on the junior-level management and the entire organisation. On the other hand, a decentralised approach refers to the agility of decision-making across the different management levels in an organisation.
- Departmentalisation
Every organisation creates teams of people who have specific types of work. This approach is known as departmentalisation. For instance, a department can be sales, marketing, IT, human resources, or finance. People within these departments have standard skill sets and work under an executive.
- Span Of Control
The span of control indicates the number of people working under a manager. If a manager supervises a large number of people, then the team is further divided into smaller departments. This scenario is common in large organisations where multiple people work simultaneously and in similar fields.
How Does Leadership Impact The Shaping Of Organisational Structures?
Business leadership is a process through which one can influence or guide a group of people towards their goals. It includes establishing an impactful vision that others are willing to follow. True leadership within a business also actively informs the stakeholders with the needed knowledge and manages conflict between employees to ensure smooth operations.
For instance, top-level managers like chief operating officers are responsible for setting strategic goals and ensuring the team's operation aligns with the organisational vision. They also actively work to create harmony between teams to drive this company’s growth.
Now let’s learn the most significant skills that the business leaders should have –
- Visionary Thinking: The leaders must be able to craft and communicate a transparent vision for the organisation's bright future.
- Problem-Solving: They often experience numerous challenges that should be mitigated quickly. Thus, they need strong problem-solving and analytical skills.
- Strategic Planning: The leaders must be able to plan strategically by understanding the market dynamics. Based on this, they must set proper objectives and create plans.
- Communication: The real leaders clearly express their ideas and listen to what the others are saying.
- Emotional Intelligence: It’s the capacity through which an individual can control and express their emotions. It helps leaders to manage interpersonal relationships, manage stress, mentor teams, and deliver feedback.
The Importance of Management in Organisational Success
Apart from leadership skills, a leader must have strong managerial skills. Their management strategies guide businesses in the right direction during tough times. Managers are responsible for controlling and coordinating regular operations. They focus on the effectiveness of the processes and resources and ensure that the tasks are completed as per the plans. Effective management also includes increasing employee performance and promoting a healthy working environment.
A robust management plan helps to craft business success factors in the following ways –
- Defining roles and responsibilities
- Structured workflow
- Employee engagement and moral values
- Resource allocation
- Strategic vision
Case Studies: Balancing of leadership and management for business success
Successful leaders understand the art of balancing leadership and management. So, here are some real-life examples that will help you understand the approach better.
- Steve Jobs was a business leader and manager who preferred hands-on experiments. So, he devoted himself to product design and development. As a result, his products reflect a perfect blend of technology and creativity, which created a huge success for Apple.
- Bill Gates believed in the authorisation leadership style. However, he also integrated other styles and management strategies. For example, he encouraged and managed people's creativity and innovation. He never hesitated to make or change decisions according to the situation. This approach made a considerable contribution to Microsoft's success.
The above examples highlight that balancing leadership and management is not about choosing one over the other. Business leaders must integrate these strategically to achieve organisational success through more innovation, employee engagement, and productivity.
Conclusion
A successful organisational structure includes influential leadership and management strategies. With their right skill sets, leaders and managers assist businesses in achieving organisational goals.
So, are you seeking to join an accounting and finance course? Do you want to be recognised around the globe with this certification? Enrol in the ACCA Course from Imarticus Learning. This course will guide you in preparing for various domains, including management and leadership.
