For those who work in large enterprises in administrative divisions, it is probably clear what the organizational structure is. Some companies even present them to employees at welcome trainings. We will try to figure out what it is.
Definition of a concept
To begin with, let's determine what the words “ about the organizational structure of the business” mean . This is the division of the enterprise into various departments, divisions, workshops in order to ensure an orderly process of managing an economic object.
The organizational structure of the business implies the existence of clear relationships between all departments of the company, as well as the designated definition of areas of responsibility.
What is needed for
The business structure of the enterprise is designed to ensure the development of the organization as a whole. Its presence allows the responsible link to quickly make a decision, determine the area of responsibility and quickly transfer information to the right structural unit.
The organizational structure of a company’s business is not something static; it can change quite often, adapting to changes in the economy. This is due to the fact that any ambitious leader seeks to ensure that his company interacts with other organizations as efficiently as possible, and that employees fulfill their duties in a quality manner.
How enterprise structure can be modified
The hierarchical structure is a combination of many departments, such as the sales department, production department, accounting, whose main function is to provide the activity with resources.
The structure of a business can undergo changes if process units are created to solve certain problems by order of the head, which deal with more private issues. For example, a group of sales managers can be formed who work on individual orders. Such an organizational structure is called a matrix, or two-arm. It can look as follows:
More on matrix structures
With such a business organization, process units rent resources from the main units in order to perform specific tasks. To implement such projects, groups of employees are created, which are distinguished by the main divisions. Workers united in such groups are subordinate to both the main manager and the process manager.
In order to avoid misunderstandings, an agreement is concluded between the employee and two managers, on the basis of which the resource unit is responsible for the quality of the task implemented by the employee.
A business structure organized by a matrix type has a definite advantage: the presence of clear requirements for process structural units increases the efficiency of a resource unit.
This type of organization is most widely used in design companies and where there is a high variety of business processes. Such a structure is also useful in that it forms market relations between departments and reduces the number of senior and middle managers.
An example of a successful company that uses a project structure for various types of software products is MicroSoft.
Classification of company strategies
The business structure can also be classified according to the level at which strategically important decisions are made.
It is customary to distinguish three types of strategies:
· Corporate;
· Business;
· Functional.
It is worth noting that in order to succeed, all strategies must be closely interconnected and coordinated, and structural units must interact with each other. Next, we will describe in detail about each of them.
1. Corporate strategy
This is the highest level in this classification in the framework of the concept of “ business development structure” . Corporate strategy determines the general direction of the company’s development, dynamics in its sales activities. One of the most important goals of the corporate strategy is to determine the direction of activity within the company and to identify where the investment should be directed.
At this level, the following issues are addressed:
1) on the distribution of resources between structural units;
2) on changing the structure of the organization;
3) resolving issues related to integration with external structures.
2. Economic (competitive) strategy
At this level, the organization develops business conduct aimed at creating competitive advantages for a particular product market. As part of this strategy, pricing policy is determined, it is decided, due to which competitors will prevail. At this level, a business plan is being developed. In companies with one type of activity, corporate and competitive strategies coincide.
3. Functional strategies
For their development, the structural divisions of the company are responsible . The basis of a functional strategy is necessarily taken by corporate and business. It is designed to ensure the effective functioning of the unit in the framework of the business policy of the enterprise. It is appropriate to talk about the strategies of the financial division, the department of personnel management and marketing.
In particular, the main task of the production department may be to increase the quantity / quality of products. A financial strategy can be aimed at increasing profits and reducing costs.
Business Development Strategies. Kinds
At the corporate strategy level, four approaches to the development of the company can be distinguished. Consider them.
1. Limited growth. This strategy is chosen by companies with stable technology. Goals are determined depending on what has been achieved at the moment and undergo adjustments if external conditions change. This is the easiest and least risky way to implement.
2. Growth. It is most successfully used in rapidly developing industries where technology is often changing. Here, the method of comparing the indicators of the current period compared with the previous one is used.
3. Reduction. This strategy is characterized by setting targets below those achieved in the past period. This type of development is most rarely chosen and is typical for companies where there is a tendency to lower profits and there are no effective solutions to change the situation.
As part of this strategy, there are:
1) liquidation (the company is no longer able to conduct business);
2) obtaining the maximum possible income in the short term (a business can bring substantial income at minimal cost);
3) reduction (the organization parted with one of the areas of business / structural unit).
4. Combined strategy. It is characteristic of large business (the presence of several industries) and can be a combination of any three strategies.
Small business structure
Very often, it is novice entrepreneurs who lose the money invested in the development and burn out. This is largely due to the fact that the owners of these projects do not pay due attention to planning.
The business planning structure of both a small and a large company must contain the following items:
1) a summary of the project, its description;
2) information about the participants;
3) a description of the product or service that will be presented on the market;
4) market analysis of competitors;
5) sales plan, media plan;
6) financing;
7) risk analysis.
About the benefits of planning
The structure of a business , even the smallest one, needs detailed planning for a number of reasons. Consider them.
1. A well-thought-out algorithm of actions and a preliminary analysis of the situation will help to save money and evaluate the profitability of your project.
2. Planning helps to make the business development process more predictable, to calculate possible difficulties. The presence of a ready-made algorithm makes it possible to more correctly build subsequent forecasts.
3. High probability of attracting investments: those who are willing to invest in the development of another's business speak the language of numbers. Only the calculation will help confirm the profitability of the project.
4. When you make a plan, you get a tool for managing your business.