Organizational structure isn't just a matter for bureaucrats to worry about. The way you structure your company or non-profit--who reports to whom, and who has the power to make decisions--can affect your efficiency and your company morale. A structure that doesn't make it clear where the authority lies can leave employees confused about who to turn to for direction or authorization. Even if you started your organization with a well-designed structure, it's possible that as your business has grown, it has outgrown your original design.

Write down your current organizational structure. Whether your organization is a large hierarchy with one person at the top and several layers of management or a small company where all the decision-making comes from you, you'll need it to get it down on paper before you decide how to improve it. The standard approach, the Reference for Business website states, is to draw a box for each staff position with lines leading to and from the box to represent people that staff person manages and reports to.

Decide if the structure suits your organization and carries out your purposes, the Inovus website states. It may be that all you need to improve things is to remove a layer of management, but it's also possible that if you've expanded out to multiple locations, the managers in different cities need more independence or flexibility in order to get the job done.

Select the new structure that will allow for the most efficiency and productivity. Assigning responsibility geographically is one approach, Reference For Business states. Another approach is to structure separate chains of command into human resources, sales, IT and other departments. A third is to divide up operations based on the market--structure the company based on who deals with corporate customers, small-business customers, government customers and so on. You could also completely reject a hieriarchical structure and create flexible teams to work on different projects.

Share the new organizational charts with the organization, the Business website recommends. Employees need to know whom they report to, who they contact for information and who's responsible for various functions in the system. Treating structure as a secret will only lead to confusion.


There are several software packages for helping with organizational design.