Effective Organizational Structure

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In order to determine the effectiveness of a business, first it must be determined how well employees work and how productive they are. Particularly in new businesses, it’s important and necessary to decide the purpose and goal of the organization. Once this vision is cemented, an organizational structure is devised to consistently and constantly maintain and work toward the business’ goal and purpose.

Mission Statement

Each company must have a distinct mission statement. The mission statement should highlight the importance of effective communication between co-workers. It should also inspire and promote innovation and expect efficiency. The organizational structure of the business should be designed around the goals of the mission statement.


The type of organizational structure will be determined by the business’ mission statement and the level of formality of the structure. The organizational structure can be based on a department or on a particular project. If the organizational structure is based on a particular department, functions will be divided by the types of staff within the department.

Chain of Command

The business’ chain of command must be planned. If the business has one definitive leader, that person’s role must have a title. If the business has more than one leader, each leader should take on a different role from each other. Guidelines can be set to explain when and how interaction among departments should take place.


The business manager must choose between a centralized, formal organizational structure or a decentralized, informal organizational structure. Centralized structures assign specific roles to individuals, generally from the top down. Decentralized structures perform on a cooperative level, with many workers performing many functions in pursuit of the business goal.


Each person involved in the organizational structure should have a defined role and responsibility. Individual functions should not overlap unless absolutely necessary, or unless certain functions are shared amongst a few people.


Subordinate roles should also be included in the organizational structure. Subordinates must be clear on which supervisors they should report to and consult with on certain issues or problems. Certain subordinates report to designated supervisors. If more serious issues are taking place, such as a death in the family, the subordinate will most likely converse with whichever supervisor he feels most comfortable with. Managers can also decide how and when interactions between employees and supervisors take place, such as certain times of the day or week.


A business’ organizational structure should be flexible and able to adapt to change. As the organization grows, certain processes will need to expand and adjust, as well. Supervisors should consult with each other daily or weekly concerning the overall success of the company. Subordinates should also feel that they’re able to make suggestions to better the business.


About the Author

As a full-time writer in New York's Hudson Valley, Lindsay Pietroluongo's nightlife column and photos have appeared regularly in the "Poughkeepsie Journal" since 2007. Additional publications include "Chronogram," the "New Paltz Sojourn," "About Town" newspaper and "Outsider" magazine. Pietroluongo graduated from Marist College with a B.A. in English.

Photo Credits

  • business colleagues preparing for business meeting image by Vladimir Melnik from Fotolia.com