Importance of organising and organisation structure

Why organising matters:

• Benefits of specialisation: each person does a part of the work again and again, and becomes expert at it.
• Clarity in working relationships: everyone knows who reports to whom.
• Optimum use of resources: duplication of work is avoided, so there is less waste.
• Adaptation to change: a well-organised firm can change its structure as its needs change.
• Effective administration: clear roles avoid confusion.
• Development of personnel: managers delegate routine work, which trains subordinates and frees managers for new ideas.
• Expansion and growth: a sound structure lets a firm add new jobs, departments and products.

The organisation structure is the framework within which managers and employees work: the pattern of relationships among people, work and resources. It is shown in an organisation chart. Peter Drucker warned that 'the wrong structure will seriously impair business performance and even destroy it'. As a firm grows, new functions and levels appear, so its structure must change too.

The span of management is the number of subordinates a superior can manage effectively. It decides how many levels of management the structure has: a narrow span gives many levels, a wide span gives few.