Organizational Structure: Definition, Types, and Functions

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The organizational structure plays an important role for the smooth running of a company's activities, both small and large scale. This is because organizing will make work more effective and not centralized in one control.

The function of the organizational structure is to clarify every function and relationship between the parts in a company. So that it will be clear who is responsible for a job in one field.

In a company, usually the organizational structure is depicted in a chart or chart. Its purpose is to organize job positions as well as establish lines of communication and authority.

What is an organizational structure, and how does it function in the company? Check out the following explanation!

Definition of Organizational Structure

The organizational structure means a hierarchical line that contains the components of a company. This structure will clarify the function and position of each job position clearly. This includes the distribution of rights and obligations.

The goal is for each component of the company to run optimally so that the company's activities will run effectively and efficiently. With this structure, a superior can assign tasks to subordinates fairly and optimally.

Conversely, without a structure, an organization will experience chaos in the division of tasks. This is because there are no company components that can be given responsibility according to their capabilities.

Types of Company Organizational Structure

In a company structure, there are parts that belong to the core ranks, which consists of high-ranking company officials. Examples are the board of directors, managers, and the division. Then the arrangement underneath is the staff.

In general, the components of the organizational structure consist of:

  • CEO (Chief Executive Officer) which is the highest position in an organization. Its main task is to provide direction and purpose when the organization is running.

  • In general, in an organization, there are at least three directors, namely managing director, finance director, and personnel director. The managing director usually deals directly with the CEO. Meanwhile, the finance director is in charge of overseeing the company's financial operations. And the director of personnel works directly with the employment and resources of the organization.

  • Managers whose main task is to integrate various variables, such as direction, connection, selection, communication, and training.

  • Administration and warehouse, are components that must be present in a growing business. Its duties and functions are to check all company transactions related to other parties, accounting and revenue and expense reports.

  • The regional division with its duties and functions is to carry out the standard policies and procedures of the head office. Regional divisions usually operate as business entities to increase the added value of the company. In a business dealing with shareholdings, regional divisions are required to exist in the corporate structure.
In particular, the company structure consists of five types, namely:

Functional Structure

According to this structure, the division of the organizational structure within the company is based on the function of each component. This structure is among the most commonly used by companies.

The trick is to group the organization into several units and then include workers in it. There are at least five main divisions, namely the personnel division, marketing, production, purchasing, and the general division.

The advantages of a functional structure are having a program that is directed, clear, and fast so that the budget is absorbed more precisely on target. Promotion of functional officials has also become faster. Not only that, usually in this structure the solidarity of fellow members is also high.

Business Structure

Based on this type of structure, the organizational structure of the company must be based on the importance of business development. The goal is to carry out product research so that the company's components will be broader.

Project Structure

As the name implies, the formation of a project structure is done only to work on a project within the company. And will be eliminated when the project is completed or successful.

One of the advantages of this structure is that the relationship between all the top leaders of the company is well-maintained. Because there is a basis for deliberation as a step to determine company policy.

Matrix Structure

The organizational structure formed aims to work on various projects that are being developed by the company.

The division of this structure consists of a head or leader, namely by the main director. Then underneath there is a manager or project head who is responsible for the project.

This structure involves, motivates, and challenges each employee to develop their skills. The advantage of this structure is that it allows the experts to be transferred to any field that is needed.

Work Team Structure

This structure is formed not permanently or temporarily. This means that the purpose of forming a work team structure is to handle a project that is unexpected in nature.

After the project is completed, the team structure can be dissolved or it can be maintained. Usually, this team consists of reliable personnel so that they are guaranteed to be able to complete the project quickly and well.

Function of Company Organizational Structure

The formation of an organizational structure in a company has several functions, namely:

Establishing Member Responsibilities

With the existence of a company structure, each member will realize that they have a duty that must be accountable to their superiors or leaders.

Describe the Position of Each Member

The structure in a company is useful for knowing who is the chairman and subordinates. So that in the future it can facilitate coordination and relationships.

Make it easier to share tasks

The positions in the company structure have been formed according to their respective fields of work. This of course will assist the company in dividing the tasks because the description is clear.

Clarify the Path of Relationships in Work

The relationship path is needed to carry out the work and responsibilities of every employee in the company. So that in the path of completing a job it will be more effective and can provide mutual benefits.

The existence of a company structure will clarify the division of tasks for each office holder. Coordination between positions can also be well established so as to help companies realize greater planning.

Basically, the duties of each position in a company or organization are interrelated. For example, the sales division with the production division that each need information in terms of invoices, track sales of most products, and determine prices.

In addition to implementing an organizational structure, one way to manage a company to keep growing is by managing its finances effectively. Management of company finances also requires coordination between all divisions.

Journals are online accounting software that can make it easier for you to manage company finances more reliably and safely. The journal has several excellent features, namely business financial reports, invoicing, and inventory.

Now, monitoring business developments can be done easily through the Journal application. It's time for you to turn to the Journal as an online accounting software that eases every administrative need.