Analyzing the Impact of Organizational Structure on Firm Performance

This essay explores the critical relationship between organizational structure and performance, emphasizing how a well-defined structure can positively impact a company's productivity and profitability. It uses Sainsbury's hierarchical structure as an example, highlighting how clear roles and responsibilities contribute to enhanced employee performance and overall organizational success. The essay also touches on various organizational structures like functional, divisional, and flat, and their potential effects on staff performance. Ultimately, the essay concludes that a strategically chosen organizational structure can provide a competitive advantage by boosting employee productivity and improving customer satisfaction.

ORGANIZATIONAL
BEHAVIOUR

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Analysing the relationship between organizational structure and performance..........................3
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
Organizational behaviour is defined as study of developing better understanding about how
individuals collaborate and coordinate with others in effective and appropriate way. The
principles of this study applied mostly in attempts to make ventures whether it is small or large,
operate more productively and effectively, which is quite beneficial for their progress in
particular market. The current presentation will be based on specific topic and that is to analyse
interrelationship between organization structure and performance of a company. Organizational
structure plays vital role in growth and development of organizations as it contributes to enhance
a brand productivity and enable it to be productive in industry, where it established their venture.
An infrastructure of companies contributes in excellent growth of ventures. It is important in the
context of varied firms such as Sainsbury that operates under retail industry and effort to give
tough competition to main rivals like TESCO, ASDA, Morrison's, etc.
MAIN BODY
Analysing the relationship between organizational structure and performance
An organizational structure is described as effective system which clearly outlines how
certain activities and practices are directed & managed, in order to achieve the objective and
aims of an company, such as Sainsbury.
While, organizational performance refer to sum of actual results that a firm measure
against their intended outputs.
Both these terms are related with each other and put positive impact on performance of
organizations. For example, effective and usage of appropriate organizational structure among
list of many, firm may obtain a lot of benefits as it assist to enhance their productivity and
specify roles and accountabilities to each candidate.
In the world of business, there are varied forms of structures that organizations used
available in bulk. Each company whether it is large or small consider, chosen and used specific
structure according to their size, scope, and number of operations. When the business format is
appropriate, a firm may grow rapidly as it help to increase their performance and profitability
level.
For example, Sainsbury's uses hierarchical organizational structure that may put positive
impact on workers performance and then organization as this format may clarify accountabilities
to all candidates in term of dividing departments and directing employees who work under that

about what to do and how. It may provide a lot of benefits to firm in term of establishing clear
lines of authority and comprehending among workers about their accountabilities and duties,
which drive their attention to be productive and allow firm to be competitive. With this structure,
supermarket may develop an environment at workplace that clarify accountability to employees
about strategic directions and actions they effort to take at varied management levels.
An company or business format is an essential and useful part of ventures, because it
described how jobs are formally separated, grouped and coordinated. The relationship between
Sainsbury's structure and performance is based on clear understanding among existing and new
employees about their duties, according to which they may act and take action. The structure is
one of those elements that affect or influence work performance and productivity of candidates
as well as their satisfaction level. Furthermore, the relationship between both concepts is
analysed by analysing the productivity and profitability of firm. For example, when the structure
is appropriate, organization may grow effectively and productively. On the other hand, poor and
ineffective organizational structure may put negative impact on business success and its
operational efficiency, which is not acceptable and better for brand. So it is quite essential to
select and use those that help to create positive environment and spread positivity at workplace.
Hierarchy, functional, divisional, and flat are the types of organizations structures that
accessible in the world of business and utilized by several firms on the basis of number of
functions and operations. Each structure may affect on staffs performance of Sainsbury's that
established in the United Kingdom and attempt to offer its quality services and products to
customers. As key element structure of venture allow firm to be productive and successful in
term of developing understanding about work, activity and practice that employees may have to
conduct in effective manner.
A structure define who complete specific task and how, which is quite important to
specify for management to all workers as it may enable them to act accordingly and allow to
contribute to specific extent regarding aim achievements. Effective format may requires that
roles among employees may be clearly assigned and defined, which enable them to reduce risk
of being failure and ineffective.
When the comprehending related to daily work is clear, then candidates may perform in
productive way, which in return increase organizational performance excellently even better than
previous years or months. Effectiveness of organization structure may influence the way

individual and management within firm react and respond to varied circumstances that may
occur suddenly. It permits manager and leader to take fast decision about organizational growth
and development within industry and also strengthen them to improve operating efficiency,
which is important and beneficial. The best thing about hierarchical organization structure is that
it contribute to reduce potential threat of duplication of work that put positive impact on brand as
they may offer fresh and unique services without copying from others. It also provides facility to
communicate and coordinate with other employees who may help to develop or improve others
effectiveness in term of skills development, through which individual may grow and allow firm
to do so.
CONCLUSION
On the basis of above discussion, it has been concluded that by choosing and using
hierarchical organizational structure, organization has gained competitive advantages, because it
has contributed to increased its workers performance level that directly or indirectly supported
firm to perform productively and profitably. Furthermore, company has enhanced the
satisfactory level of customers successfully and increased its profitability more than other
brands, as its employees had better understanding about whom they report to and who reported
them at workplace for purpose of aim achievement discussion. By using chosen structure, firm
has created positive and productive working environment that boosted employees productivity.

REFERENCES
Books and journals
Joseph, J. and Gaba, V., 2020. Organizational structure, information processing, and decision-
making: a retrospective and road map for research. Academy of Management Annals.
14(1). pp.267-302.
Koçyiğit, Y. and Akkaya, B., 2020. The role of organizational flexibility in organizational agility:
A research on SMEs. Business Management and Strategy. 11(1). pp.110-123.
Waruwu, H. and et.al., 2020. The Role of Transformational Leadership, Organizational Learning
and Structure on Innovation Capacity: Evidence from Indonesia Private Schools.
EduPsyCouns: Journal of Education, Psychology and Counseling. 2(1). pp.378-397.