How to Design an Organization Structure One important element of ensuring the efficient operation of a business is determining the functions

of its workers. Especially in the case of new ventures, an important first step is to determine the purpose of the business or organization. Once that has been accomplished, the emphasis should be on designing an efficient organizational structure for a company or business. Instructions 1-Develop a clear mission statement for the organization. Focus the organization structure around the mission statement. The mission statement should include a strong emphasis on encouraging good communications between workers at every level as well as inspiring innovation and ensuring efficiency. 2-Decide whether the organization structure will be centralized and formal or decentralized and informal. For centralized and formal organizations, the organization structure takes more of a top-down approach with strictly defined work roles. For decentralized and informal organizations, there is more of a cooperative approach with workers often performing a wide range of functions. 3-Determine the nature of the organization structure based on the mission statement and the formality of the organization structure. Organization structure can be department based or based on a particular project or process. Department -based organization structure is often divided into line functions (such as manufacturing) and staff functions (such as human resources). 4-Design the overall chain of command for the organization. If there is a single overall director or leader, determine the title for that role. If there are dual or multiple leaders, divide the overall company function between the various roles in a way that makes sense for the particular organization.

5-Determine the authority and responsibility to be assigned to each position in the organization structure. Attempt to achieve a minimum of overlapping functions. Also, attempt to minimize any possible confusion by subordinates concerning which supervisors to consult with on specific issues. 6-Add subordinate roles to the chain of command. Determine the process of reporting from subordinate to supervisor and make allowances for special circumstances (such as grievance resolution). Indicate if, where and how interactions across departments or projects will take place.

Tips & Warnings The organization structure should be flexible enough to accommodate changes in the organization as it grows. Make provisions for supervisors to consult with one another on day-to-day operations and the overall workings of the organization. Allow subordinates to make suggestions concerning the organization and organization structure.