THE ORGANIZATION'S STRUCTURE

WHAT IS ORGANIZATIONAL STRUCTURE?​

 UNDERSTANDING AN
ORGANIZATIONAL STRUCTURE

A successful organizational structure defines each

employee's job and how it fits within the overall
system.

Organizational structure lays out who does what

so the company can meet its objectives.

Provides a company with a visual representation

of how it is shaped and how it can best move
forward in achieving its goals.
 UNDERSTANDING AN
ORGANIZATIONAL STRUCTURE

Normally illustrated in some sort of chart or

diagram like a pyramid, where the most powerful
members of the organization sit at the top, while
those with the least amount of power are at the
bottom.

Not having a formal structure in place may prove

difficult for certain organizations. For instance,
employees may have difficulty knowing to whom
they should report. That can lead to uncertainty
as to who is responsible for what in the This Photo by Unknown Author is licensed under CC BY

organization.
 Centralized
• Traditionally structured
• Usually defined as chain of
command
• It is often used in retail chains.
ORGANIZATIONAL • Businesses with a centralised
STRUCTURES management style can often
be slow to respond to
changes in the business
environment or local changes
near their branches.
• There are very clear
responsibilities for each role,
with subordinate roles
defaulting to the guidance of
their superiors.
Decentralized
• One in which senior
management has shifted the
authority for some types of
decision making to lower
levels in the organization.
• Significant person in an
organization has the authority
to make decisions that impact
his or her area of
responsibility.
• Decisions can be pushed
down to individual
employees, though those
decisions are typically limited
to expenditures related to
customer service
 Centralized
ADVANTAGES
• consistency across the business
• the business has a clear direction
• operations and decisions are closely
ADVANTAGES •
controlled and managed
the chain of command and
AND accountability are clear
DISADVANTAGES DISADVANTAGES
• it can demotivate employees
• a standardized approach may not
work in all business locations
• it may lower productivity
Decentralized
ADVANTAGES
• improved employee motivation
• allowing managers lower down the
chain to make decisions to suit their
•
local area and customers
more responsibility for employees
DISADVANTAGES
• consistency is not achieved across
the business
• managers can make ineffective
decisions
• may negatively impact sales and
overall business performance
because of ineffective decisions by
managers lower down the chain
TYPES OF ORGANIZATIONAL
STRUCTURE

• Functional Structure
• Divisional or Multidivisional
Structure
• Team-Based
• Flat (Flatarchy) Structure
• Matrix Structure
• Circular Structure
• Network Structure
• It is referred to as a bureaucratic organizational structure and breaks up

a company based on the specialization of its workforce.

• Most small-to-medium-sized businesses implement a functional
structure.
• Dividing the firm into departments consisting of marketing, sales, and
operations is the act of using a bureaucratic organizational structure.
• It is common among large companies with many business units.

• Company that uses this method structures its leadership team

based on the products, projects, or subsidiaries they operate.

• Divisions may also be designated geographically in addition to

specialization.
team-based organizations segregate into close-knit teams of
employees that serve particular goals and functions, but where
each team is a unit that contains both leaders and workers.
• Also known as a horizontal structure, is relatively newer, and is
used among many startups. As the name alludes, it flattens the
hierarchy and chain of command and gives its employees a lot of
autonomy.

• Companies that use this type of structure have a high speed of

implementation.
• The most confusing and the
least used.

• This structure matrixes

employees across different
superiors, divisions, or
departments.

• An employee working for a

matrixed company, for
example, may have duties
in both sales and
customer service.
• Circular structures are
hierarchical, but they are
said to be circular as it
places higher-level
employees and managers at
the center of the
organization with
concentric rings expanding
outward, which contain
lower-level employees and
staff.

• This way of organizing is

intended to encourage
open communication and
collaboration among the
different ranks.
• The network structure
organizes contractors and
third-party vendors to
carry out certain key
functions. It features a
relatively small
headquarters with
geographically-dispersed
satellite offices, along with
key functions outsourced to
other firms and
consultants.
 BENEFITS OF
ORGANIZATIONAL
STRUCTURES
 The structure not only defines a company's
hierarchy but also allows the firm to lay out the
pay structure for its employees.
 By putting the organizational structure in
place, the firm can decide salary grades and
ranges for each position.
 The structure also makes operations more
efficient and much more effective. By
separating employees and functions into
different departments, the company can
perform different operations at once
seamlessly.
BUSINESS ENVIRONMENT :
OVERCOMING CONSTRAINTS
WHAT IS BUSINESS ENVIRONMENT CONSTRAINTS?
 Mechanism to add limiting conditions within a scenario. The conditions could be based
on existing business contracts, procurement policies, or business rules. For example, a
favorite supplier rule, award limit rule, supplier count rule, total cost rule etc. can be defined
in a scenario.

 Businesses are constrained by a host of factors in their surrounding environment. For

example, legal constraints determine how they produce (e.g. Health and Safety and Product
Safety laws). Social constraints determine the tastes and buying patterns of consumers.

 The actions of competitors.

 Social requirements and expectations. The sorts of expectations that society has of
businesses e.g. to operate in an ethical way

 economic constraints e.g. the amount of income that consumers generally have to spend

 Technological constraints. Often what businesses are able to produce and sell and how they
operate is determined by the technologies available to them.
 WAYS TO OVERCOME
CONSTRAINTS IN BUSINESS

1. Define the problem

be sure you’re not missing the forest for the trees.
If you have a large issue on your hands, you’ll
want to look at it from several different angles:

 Competition
Is a competitor’s promotion or pricing affecting
your sales? Are there new entrants in your
market? How are they marketing their product or
business?
 WAYS TO OVERCOME
CONSTRAINTS IN BUSINESS

 Business model
Is your business model sustainable? Is it realistic
for how fast you want to grow? Should you
explore different pricing or cost strategies?

 Market factors
How are world events and the nation’s economy
affecting your customers and your sales?
 WAYS TO OVERCOME
CONSTRAINTS IN BUSINESS

 Team
Are there any issues affecting your team? Do they
have the tools and resources they need to
succeed?

 Goal alignment
Is everyone on your team
working toward the same goal? Have you
communicated
your short-term and long-term business goals cle
arly
and often?
 WAYS TO OVERCOME
CONSTRAINTS IN BUSINESS

2. Conduct a SWOT analysis

 SWOT is a great tool for strategic planning and

bringing multiple viewpoints to the table when
you’re looking at investing resources to solve a
problem. This may even be incorporated in
your attempts to identify the source of your
problem, as it can quickly outline specific
strengths and weaknesses of your business.
And then by identifying any potential
opportunities or threats, you can utilize your
findings to kickstart a solution.
 WAYS TO OVERCOME
CONSTRAINTS IN BUSINESS

3. Identify multiple solutions with design

thinking

 It’s not about finding the most complex

problems to solve, but about finding common
needs within the organization and in the real
world and coming up with solutions that fit
those needs. When you’re solving business
problems, this applies in the sense that you’re
looking for solutions that address underlying
issues—you’re looking at the big picture.
 WAYS TO OVERCOME
CONSTRAINTS IN BUSINESS

4. Conduct market research and customer

outreach

 Market research and the insights you get from

customer outreach aren’t a silver bullet. Many
companies struggle with what they should do
with conflicting data points. But it’s worth
struggling through and gathering information
that can help you better understand
your target market.
 WAYS TO OVERCOME
CONSTRAINTS IN BUSINESS

5. Seek input from your team and your

mentors

 Freedom to express concerns, opinions, and

ideas will allow people in an organization to
speak up. Their feedback is going to help you
move faster and more efficiently.
 WAYS TO OVERCOME
CONSTRAINTS IN BUSINESS

6. Apply lean planning for nimble execution

 By adopting the
lean business planning method—the process
of revising your business strategy regularly—
you’ll be able to shift your strategies more
fluidly. You don’t want to change course every
week, and you don’t want to fall victim to
shiny object thinking. But you can strike a
balance that allows you to
reduce your business’s risk while keeping your
team heading in the right direction.
 WAYS TO OVERCOME
CONSTRAINTS IN BUSINESS

7. Model different financial scenarios

 build a few different financial forecasts so you

can model different scenarios. You might find
that the idea that seemed the strongest will
take longer than you thought to reverse a
negative financial trend. At the very least you’ll
have better insight into the financial impact of
moving in a different direction.
 WAYS TO OVERCOME
CONSTRAINTS IN BUSINESS

8. Watch your cash flow

 particular attention to your cash flow and your

cash flow forecast. Understanding when your
company is at risk of running out of cash in the
bank can help you be proactive. It’s a lot easier
to get a line of credit while your financials still
look good and healthy, than when you’re one
pay period away from ruin.
 WAYS TO OVERCOME
CONSTRAINTS IN BUSINESS

9. Use a decision-making framework

 Once you’ve gathered all the information you

need, generated a number of ideas, and done
some financial modeling, you might still feel
uncertain.
 WAYS TO OVERCOME
CONSTRAINTS IN BUSINESS

10. Identify key metrics to track

 Decide on a few key performance indicators.

Take a baseline measurement, and set a goal
and a timeframe. You’re essentially translating
your solution into a plan, complete with
milestones and goals. Without these, you’ve
simply made a blind decision with no way to
track success. You need those
goals and milestones to make your plan real.