Business Organization: Structure, Types, and Charts
What is Organization?
This stage of the administrative process is based on achieving efficiency. Efficiency is only possible through the rational management and coordination of all resources.
The Importance of Organization
Organization establishes the enterprise architecture, simplifies work, and reduces costs.
Division of Work
This comprises a sequence of steps in the following stages:
- Describe the processes
- Define the most important functions
- Classify and group functions according to the macro processes
- Establish lines of communication
Process to define the micro-process of organizing the processes of the departments or areas of the company.
Steps to Organize
- Have clear objectives and resources of the company
- Make a list of things to do
- Divide these activities into units
- Assign each activity to the right person
- Choose a leader
- Keep up the organization of the company
Types of Departmentalization
It is the organic division of a company that allows it to efficiently perform its various activities.
- Functional: Groups similar activities according to their main function.
- By Product: Based on a product or product group.
- By Geographical Territory: Divisions are made based on geographical areas where the company operates.
- By Client: Creates units to identify the various buyers or customers.
- By Sequence: Used when there are several shifts.
- By Process or Equipment: Grouping of equipment in various departments for efficiency and time savings.
Models of Organization
- Linear or Military: This is one of the oldest known structures, also called scalar.
- Functional: This allows the specialist in a particular area to strengthen their management in a limited and clearly defined area of authority. This specialist plans, prepares, and implements their own plans, being responsible for the results.
- Staff: An organization in which the director or officer has a team of advisers with no direct authority over employees. Directors seek facts, inform, and advise the executive, but the power of authority and responsibility is the same as in the linear organization.
- Committees: A change in the type of linear organization, staff, or senior staff and functional. These committees are not necessarily line staff and senior staff. However, they gather ideas from various groups for further study.
Hierarchy of Authority
Directorships
The board of directors of a company has the following basic functions:
- Select the director or general manager of the company
- Distribute dividends
- Make strategic decisions
- Confirm the decisions of other executives
- Advise company managers
- See the big picture to see what has been accomplished
Organizational Charts
Charts are a graphical representation of the organizational structure of a company or organization that reflects, in schematic form, the position of the areas that comprise it, its hierarchy, and lines of authority and advice.
Classification of Organizational Charts
Classification by Property
Classification by Area
Classification by Content
By Object
- Informational: Designed to be available to all age groups, accessible to non-specialists.
- Analytical: For the analysis of certain aspects of organizational behavior. Certain types of information presented on a flowchart allow for a macro or global view.
- Formal: Represents the operating model of a planned or formal organization and has a written instrument of approval.
- Informal: Represents a model that does not yet have a written instrument of approval.
By Area
- General: Contains information representative of an organization up to a certain hierarchical level. In the public sector, it may comprise up to management level, while in the private sector, it often goes to the department or office level.
- Specific: Shows the structure of an area of the organization.
By Content
- Integrals: Graphical representations of all administrative units of an organization and their hierarchy or dependence.
- Functional: Includes the main functions assigned to the units and their interrelationships. Useful for training staff and presenting the organization in general.
- Positions, Places, and Units: Indicate the needs for jobs and the number of places required for each unit. Also includes the names of those who occupy the positions.
Types of Charts
- Vertical: Branching units up and down from the top, breaking down the different hierarchical levels in a phased manner.
- Horizontal: Units are deployed from left to right, with the holder on the far left. Hierarchical levels are arranged in columns, while relations between the units are sorted by horizontal lines.
- Mixed: This type of chart uses vertical and horizontal combinations to expand the possibilities of graphing. Recommended for organizations with a large number of units at the base.
- Circular: Senior ranks are in the middle of a series of concentric circles, each representing a different level of authority, decreasing from the center toward the ends. The last circle indicates the lowest level.