characteristics of a good business structure

AUTHOR:DAVIDSON OTIENO OMONDI

Characteristics of a Good Business Structure

Introduction

Organization structure can be considered the most important element of any organization. “Business structure is anatomy of the business” (Dalton, Todor, Spendolini, Fielding & Porter, 1980).

This paper explores four main feature any organization would use as its structure for maximum benefit and achievement of its goals. It continues to giving the ways of making sure the organization is sustained for not only for a time period but for distant further also. This was obtained from different materials written by different authors. The four main characteristics are; 1. simplicity 2.flexibility and continuity 3.Minimum possible managerial levels 4. Clear Line of Authority.

Discussion

Simplicity. Simplicity is a state of being simple, easy to understand and in plain condition. “Simplicity in an organization is the direct inverse of complexity; which expresses a lack of order and entanglement, which are the source of waste” ( Hopej-Kaminska, Zgrzywa-Ziemak, Hopej, Kaminski & Martan, 2015). It is essential to find the presence of simplicity as a strategy-making process as well as it’s relationship with other organizational structure (Lumpkin & Dess, 1995). Simplicity is thus an Important feature and strategy any organization can incorporate in bringing up and managing a healthier business as it brings about focus.

Flexibility and Continuity. Flexibility is being adaptable to change and open-minded to new ideas. A flexible organization is one that is able to adapt and respond rapidly to changes in its external environment in order to gain superiority and sustain its competitive position  (Golden & Powell, 2000). Organizations are formed not only for a time period but for distant further also. As such, organization should be adoptable enough so that it provides the opportunity to accommodate the changes where the need may arise.

 Kocyigit & Akkaya (2020) state organizational structure flexibility is important to firms to be able to grow rapidly and that it has a positive impact on organizational agility capabilities like competence, responsiveness, and speed.

   Minimum possible managerial levels. The greater the number of managerial levels, longer is the line of communication in the chain of command, the communication has to travel along the line creating problems of the contortion and procrastination thus taking longer to address an issue in an organization structure.

Moreover, more managerial levels increase cost the organization would use for salary payment, decoration, building the enough space required, buying the stationery required and many other costs accrued in daily organizational routine. To save the organization from all this cost it is important for a business to reduce the managerial levels as possible. It is essential for any business organization to be localized to minimum possible of managerial managerial level (Ulrich, 1995).

Clear Line of Authority. In any form of structure, the organization would adopt, there should be clear lines of authority running from top to bottom or in horizontal directions. That one should be very clear about what he is expected to achieve, contribute at the specified period  and what relationships should be maintained by him at his official level. Etzioni (1959) state that staff authority  subordinated to line authority they must be modified according to the major goals of the organization as many organizational structure assume and that goals should be compatible to the authority to prevent adding other burdening goals which could be avoided

Conclusion

In order to obtain and understand the features of a good business structure, it is important to understand the meaning of the terms “business structure” :which is an anatomy of any business organization. It is very essential for a business to make sure it is well structured, and evaluate the structure regularly for achievements of it’s goals, reduce time wastage and ensure continuity and flexibility. As the business environment becomes more and more competitive businesses should strive for  their success by reviewing their structures and making sure they correctly fix in the rapid changing business environment.

Reference

Dalton, D. R., Todor, W. D.,Spendolini, M. J., Fielding, G. J., & Porter, L. W. (1980). Organization structure and performance: A critical review. Academy of management review, 5(1), 49-64.

Etzioni, A. (1959). Authority structure and organizational effectiveness. Administrative Science Quarterly, 43-67.

Golden, W., & Powell, P. (2000). Towards a definition of flexibility: in search of the Holy Grail?: Omega, 28(4), 373- 384.

Hopej-Kaminska, M., Zgrzywa-ziemak, A., Hope, M., Kaminski, R., &Martan, J. (2015). Simplicity as a Feature of an Organizational Structure.

Kocyigit, Y., &Akkaya, B. (2020). The role of organizational flexibility in organizational agility: A research on SMEs. Business Management and Strategy, 11(1), 110-123.

Lumpkin, G. T., & Dess, G. G. (1995). Simplicity as a strategy-making process: The effects of stage of organizational development and environment on performance. Academy of Management Journal, 38(5), 1386-1407.

Ulrich, K. (1995). The role of product architecture in the manufacturing firm. Research policy, 24(3), 419-440.