In most cases, a business’s organizational structure becomes more hierarchical over time. Not only does a hierarchical structure create a more formal organizational design, but it also clarifies roles and responsibilities for employees at every level. As MindTools.com notes, clear roles and responsibilities provide vital advantages necessary for continuing growth. Among the most important are increased internal control, opportunities for job specialization, improved process management and enhanced operational performance.
Strong internal controls such as separation of duties, differing levels of authority and periodic reviews are vital to manage internal risks effectively, establish accountability and maintain a competitive edge. According to the International Federation of Accountants, clear roles and responsibilities are vital to establish the decision-making hierarchy that a strong internal control system requires. For example, they divide a business into levels that determine who will create the risk management strategy, who will provide oversight and who will implement controls on an operational level.
An ability to match the right person’s skills, qualifications and experience to the right job is vital to efficient administration and achieving long-term goals. By clarifying roles and responsibilities, a growing business is better able to define job positions, which in turn allows for increased job specialization. Proper job descriptions also provide an objective basis for evaluating employee performance, identifying training needs and for promoting employees. All of these ultimately help a business to become more efficient.
Clear roles and responsibilities are necessary for creating what EMC, a global information technology company, refers to as a framework of cooperation. The larger a business becomes, the more difficult it becomes for an owner to manage it alone. However, without defining roles and responsibilities, the management environment can quickly descend into a battleground of competing egos. On the other hand, well-defined roles and responsibilities along with a decision-making framework helps to ensure that both processes and people mesh together seamlessly.
Perhaps the biggest advantage of all is that clear roles and responsibilities help to improve operational performance. Although outstanding performance relies on a number of factors, much depends on clearly defining the roles and responsibilities of each employee. This is critical not only for helping a business identify and decide when the time is right to take advantage of new opportunities, but also for making sure that work is neither overlooked, duplicated nor completed inefficiently.
- Mind Tools: Organization Design: Aligning Organizational Structure with Business Goals
- International Federation of Accountants: Evaluating and Improving Internal Control in Organizations
- Management Study Guide: Importance of Organizing Function
- EMC: Managing the Process: Roles and Responsibilities Core Premises
- Microsoft: Best Practices for Service Vendor Management
- XiXinXing/XiXinXing/Getty Images