An organization is any group of persons with a common objective. Simply put, two or more people may band together to form an organization because they determine that working together is a more effective means for creating value than if each of them continued to work separately. The study and practice of organizational design focuses o the structured processes that emerge within organizations to guide how their members (e.g., owners, executives, managers and non-managerial employees) interact with one another to pursue their mutually agreed goals and objectives with respect to the creation of value for themselves and the external environment in which the organization operates. While the initial idea for what becomes a new business may emerge suddenly, without warning, or after long deliberation but without any semblance of a formal roadmap as to how to proceed, efficient pursuit of the idea ultimately requires attention to creating and administering an appropriate organization for the business.
Structure is one of the key elements in organizational design, along with such things as strategy, culture and business processes, and establishes how senior management of the organization wishes to allocate the ability to control activities and resources throughout the organization. The building blocks of organizational structure are formal groupings of people and resources into units—departments or divisions—that focus primarily on one of several structural dimensions including functions, products, geographic areas or customers/markets. Organizational structure determines how power and authority is allocated, how information flows and who is accountable to whom through mandated reporting relationships. Structure alone cannot make an organization successful; however, if the structure is not aligned with organizational strategy it will be difficult for senior management to achieve the desired results.
There is no single structure that works best in all cases and the structure will continuously change as the organization grows and evolves with emphasis shifting from one dimension to another as circumstances dictate. In most cases an organization will initially choose a function-based organizational structure that divides work activities into functional groups such as research and development, production, sales and marketing, finance and administration (including human resources). As the organization grows it will shift the primary dimension of its structure to products or markets, either geographic or customer-based, through creation of divisions for each key product line or market. Other structures based on two or more of the dimensions—matrix or hybrid—may be used in appropriate cases when the activities of the organization have expanded into multiple product lines and/or markets.
Chapters or Articles in Books
Articles in Journals
Theses and Dissertations