Organizational Structure and Its Influence on Performance: A Report

This report examines the multifaceted influence of organizational structure on a company's success. It defines organizational structure as a system that directs activities towards achieving organizational goals, including rules, responsibilities, and information flow. The report discusses key aspects such as span of control, which determines the number of employees under a single manager, and height, referring to the levels between top management and lower-level employees. It highlights the importance of organizational structure in increasing efficiency, structuring departments, and facilitating decision-making. The report explores the impact of structure on communication, distribution of responsibility, and adaptation to change. It emphasizes the significance of developing an effective and dynamic structure to enhance internal communication, improve customer service, and promote profitability. Finally, it underscores the effect of organizational structure on employee work processes and development.

Running head: ASPECTS OF ORGANIZATIONAL STRUCTURE
ASPECTS OF ORGANIZATIONAL STRUCTURE
Name of the Student
Name of the University
Author Note

1ASPECTS OF ORGANIZATIONAL STRUCTURE
Introduction
Organizational structure can be defined as a system which is able to outline some
major activities which are directed towards the achievement of organizational goals. The
activities include, the rules, responsibilities and roles. Organizational structure is helpful in
the determination of the ways by which information is able to flow between different levels.
The structure of an organization is mainly dependent on the strategy and objectives. The
structure which is centralized in nature provides maximum levels of power to the top
management for making the decisions related to different organizational activities (Ashkenas
et al. 2015). The report will be based on the analysis of the ways by which organizational
structure is able to affect the success of the organizations.
Discussion related to the organizational structure
As discussed by Barrick et al. (2015), the ways by which lines of authority, duties and
rights of the organization are arranged are considered to be an important part of
organizational structure. Organizational structure is further able to determine the roles and
responsibilities of employees. The power related to decision making is also divided in an
effective manner with the help of proper organizational structure. Different organizations
implement different types of structures which are dependent on the operations. The
organizational structures are based on many different aspects among which two major aspects
will be discussed below,
 Span of control – This is considered to be a major aspect of organizational
structure which is able to affect different modern companies. The number of
employees who work under a single manager is defined with the help of span
of control. The departments which are thereby present in the organizations are
helpful in defining the span of control. The organizations are thereby divided

2ASPECTS OF ORGANIZATIONAL STRUCTURE
into departments based on number of employees who are a part of a single
area. The departments in organizations are structured based on the functions
which are played by different products and the customers. Departments
operate under different managers and some employees are a part of the
concerned areas (Camisón and Villar-López 2014). The organizations which
implement functional organizational structure form departments which are
based on finance, accounting and marketing. The organizational structures
which are customer based in nature are used when the company serves huge
variety of clients which include corporations and consumers. The span of
control is therefore based on the departments which are formed within the
organizations. Number of employees who belong to a particular department
are thereby under the control of the managers or leaders of that particular
department (Chang, Chen and Chiou 2015).
 Height – This is considered to be another major aspect which is able to affect
the organizational structure of different organizations. The levels which are
present between the top management of an organization and the employees
who belong to the lower levels is related to the height. Many different
organizations implement flat organizational structures. The small
organizations on the other hand hire the employees in different fields which
include, engineers and accountants. Small companies may thereby be based on
the lesser levels related to management (Cummings and Worley 2014). Large
companies have taller organizational structures which is helpful in dividing the
workload among the employees.
As discussed by Dosi and Marengo (2015), organizational structure is able to play a
key role in the success which is gained by the company in the industry. The smaller

3ASPECTS OF ORGANIZATIONAL STRUCTURE
organizations tend to develop flat organizational structure which consist of lesser number of
management levels. On the other hand, large companies develop organizational structures
which are comparatively taller. The organizational structure is thereby able to play different
roles in success and proper management of the organizations as well. One major role which is
played by organizational structure is related to increasing the levels of efficiency. The
organizations are able to use the resources to fullest capacity with the help of proper
organizational structure.
According to Eccles, Ioannou and Serafeim (2014), the organization will further
structure the organization with respect to the products and the services which are offered to
customers. The duties related to product management are thereby based on types of
customers. Harnessing the levels of experience is another important factor which is able to
affect the organizational structure in a huge manner. The organizations are further arranged
with respect to specific functions which are conducted by them and accomplishment of the
projects and tasks. The levels of synergy which exist among the skilled employees is
arranged in an effective manner with the help of organizational structure.
As discussed by Friedman (2017), the decision making based capabilities of the
organization are also affected in a positive way by the structure of the organization. The
companies can thereby structure the departments in such a manner which is helpful in making
the best possible decisions. The regional managers are capable of making the local decisions
related to needs of the consumers in an easier way as compared to the marketing manager
who operates in a distant office. Different organizational structures are used by the companies
for communication related purposes. Communication is able to play a key role in the proper
operations of different levels of management.

4ASPECTS OF ORGANIZATIONAL STRUCTURE
According to Morden (2016), the most effective manner of communicating is from
top level of the organization to the bottom levels. The executives aim at creating different
operational procedures which are further communicated to the managers and directors. The
span of control is also decided with the help of proper organizational structure. A proper
organizational structure is thereby based on the ways by which the company is divided into
different departments. Effective operations of the organizations are thereby based on the
development of proper organizational structure.
As discussed by O’Reilly III et al. (2014), organizational structure is based on the
ways by which the companies are able to communicate, distribution of responsibility and the
adaption to change as well. The organization thereby needs to develop a structure which is
effective and dynamic in nature. The structure therefore needs to productive and lead and the
company also needs to adapt to the changes in order to grow as well as survive in the
industry. The structure of an organization is thereby able to facilitate many different functions
which include, enhancing the internal communication, making business related decisions,
providing exceptional levels of customer service and further running the organization
smoothly.
According to Rothaermel (2015), the profitability levels and growth of organizations
are promoted by the organizational structure. The management is able to recognise the levels
of talent which need to added to the organization. Reporting relationships within the
organizations are also developed with the help of the structure. The structure of the
organization is able to provide the employees with standards of performance and proper job
description as well. A proper framework is developed for establishment of levels of
compensation based on each position. The high performing employees are provided with
effective room for growth with the help of proper organizational structure.

5ASPECTS OF ORGANIZATIONAL STRUCTURE
As discussed by Rothaermel (2015), the modern companies need to develop
appropriate organizational structure in order to provide the employees with effective levels of
opportunities. The development of organizational structure is considered to be an important
factor which is able to affect the operations and levels of profitability as well. The success of
organizational operations is largely dependent on the structure which has been developed.
The company thereby needs to develop the organizational structure in such a manner which
will be able to provide effective levels of opportunities to the employees to grow. The growth
of employees is thereby an important part of the development of proper organizational
structure.
The organizations are thereby able to operate in an effective manner if the structure is
developed in an efficient manner. Most important part of the development of leadership style
is related to the ways by which the company is able to increase the levels of profitability.
Organizational structure can thereby be considered to be the most important factor which is
able to affect the operations of the modern organizations. The work process of employees is
also affected by the ways by which the management is able to develop an effective structure
(Tseng and Lee 2014).
Conclusion
The report can be concluded by stating that organizational structure is the most
important part of successful operations of the organizations. The levels of profitability of the
organizations are also affected in a huge manner by the ways by which organizations are able
to develop the structure. The work process of employees is also affected by the structure of
the organization. Organizational structure is thereby considered to be the most important
factor which can change the ways by which the organizations operate. The development of
employees is also affected in a huge manner by the structure which is formed and followed

6ASPECTS OF ORGANIZATIONAL STRUCTURE
by the company. The analysis has thereby depicted that the structure of an organization is
able to contribute to the levels of success.

7ASPECTS OF ORGANIZATIONAL STRUCTURE
References
Ashkenas, R., Ulrich, D., Jick, T. and Kerr, S., 2015. The boundaryless organization:
Breaking the chains of organizational structure. John Wiley & Sons.
Barrick, M.R., Thurgood, G.R., Smith, T.A. and Courtright, S.H., 2015. Collective
organizational engagement: Linking motivational antecedents, strategic implementation, and
firm performance. Academy of Management journal, 58(1), pp.111-135.
Camisón, C. and Villar-López, A., 2014. Organizational innovation as an enabler of
technological innovation capabilities and firm performance. Journal of business
research, 67(1), pp.2891-2902.
Chang, T.Z., Chen, S.J. and Chiou, J.S., 2015. Management leadership behavior and market
orientation: The relationship and their effects on organization effectiveness and business
performance. In Marketing, technology and customer commitment in the new economy (pp.
276-281). Springer, Cham.
Cummings, T.G. and Worley, C.G., 2014. Organization development and change. Cengage
learning.
Dosi, G. and Marengo, L., 2015. The dynamics of organizational structures and performances
under diverging distributions of knowledge and different power structures. Journal of
Institutional Economics, 11(3), pp.535-559.
Eccles, R.G., Ioannou, I. and Serafeim, G., 2014. The impact of corporate sustainability on
organizational processes and performance. Management Science, 60(11), pp.2835-2857.
Friedman, S.D., 2017. Succession systems in large corporations: Characteristics and
correlates of performance. In Leadership succession (pp. 15-38). Routledge.

8ASPECTS OF ORGANIZATIONAL STRUCTURE
Morden, T., 2016. Principles of strategic management. Routledge.
O’Reilly III, C.A., Caldwell, D.F., Chatman, J.A. and Doerr, B., 2014. The promise and
problems of organizational culture: CEO personality, culture, and firm performance. Group
& Organization Management, 39(6), pp.595-625.
Rothaermel, F.T., 2015. Strategic management. McGraw-Hill Education.
Tseng, S.M. and Lee, P.S., 2014. The effect of knowledge management capability and
dynamic capability on organizational performance. Journal of Enterprise Information
Management, 27(2), pp.158-179.