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An organization structure is a framework that allots a particular space for a particular department or an individual and shows its relationship to the other. An organization structure shows the authority and responsibility relationships between the various positions in the organization by showing who reports to whom. It is an established pattern of relationship among the components of the organization. March and Simon have stated that-"Organization structure consists simply of those aspects of pattern of behaviour in the organization that are relatively stable and change only slowly." The structure of an organization is generally shown on an organization chart. It shows the authority and responsibility relationships between various positions in the organization while designing the organization structure, due attention should be given to the principles of sound organization.
Significance of Organization Structure
ü Properly designed organization can help improve teamwork and productivity by providing a framework within which the people can work together most effectively.
ü Organization structure determines the location of decision-making in the organization.
ü Sound organization structure stimulates creative thinking and initiative among organizational members by providing well defined patterns of authority.
ü A sound organization structure facilitates growth of enterprise by increasing its capacity to handle increased level of authority.
ü Organization structure provides the pattern of communication and coordination.
ü The organization structure helps a member to know what his role is and how it relates to other roles.
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