Organisational Design & Structure

Carrying over the momentum from the previous week, the aim for the week commencing the 20th of January was the introduction to related ideas of organisational design and structure. This entails considering the purpose it serves, the possible connection between structure and strategy and the principles as well as objectives of organisational structure.

Organisational structure is the skeleton of an organisation. It is an expression of who is performing the various functions and tasks of a company and how these people relate to one another. Organisational structure encompasses a list of the various job positions, titles and duties of a business, and the reporting structure or chain of command among them. Structure is a statement of the current state of affairs, not the ideals, intentions or betterment of an organisations.

Design in an organisation is much the same as for buildings, clothing and vehicles -- it's a plan. When a company's leaders develop plans for how their company should function or would perform better, they undertake the business of organisational design. Good design takes inventory of all the tasks, functions and goals of a business, and then develops groupings and orderings of job positions, departments and individuals to best and most efficiently achieve those ends. Usually, designs are expressed through an organisational chart, which helps players throughout an organisation understand functions and power relationships.

Centralised organisational structures rely on one individual to make decisions and provide direction for the company. Small businesses often use this structure since the owner is responsible for the company’s business operations. Decentralised organisational structures often have several individuals responsible for making business decisions and running the business. Decentralised organisations rely on a team environment at different levels in the business. Individuals at each level in the business may have some autonomy to make business decisions.



The organisational culture of a business reflects the mentality, work ethic and values of the company's owners and employees. Some firms are regarded as having a cut-throat culture in which employees aggressively compete for promotions and bonuses without regard to one another's feelings. Other firms have a family-friendly culture or a culture that encourages creativity. 


Organisational structures do not always require significant amounts of planning time. Many businesses have organisational structures that simply evolve during the business’s lifetime. Business owners often set the tone based on how they manage employees. Employees will perceive how the owner handles different business situations and simply adjust their work style accordingly. This will create an organisational structure by default, with no serious planning involved.