Setting Up Organization Structure

• Inside any company, a large number of activities are carried out by big groups of individuals, spread across multiple departments (e.g. Production, Sales, Marketing, Purchase, Human Resources, Administration, Inventory (Stock), IT Systems, Accounts etc.
• The activities within these departments must be properly coordinated such that every employee understands his responsibilities. Also, the employees need to understand the protocol for their communication and coordination within the department and also across various departments.
• Ideally, each department must be supervised by one single person, and the team within that department must report to her. That person remains responsible for the day-to-day decisions and performance of that department. This ensures a single line of command. Without a single command line, employee coordination is very difficult.
• If everybody takes decisions about everything, a lot of confusion and communication gaps may arise. In such cases, nobody will be responsible when things go wrong. This is usually observed in organisations which have grown without putting proper systems and processes in place.
• Of course, if the organization is very small where only one business leader takes care of all the activities, only he is the single command, but division of activities within the team is essential and applicable in such cases also.
• The tool to graphically represent the relationships and responsibilities within a company is called an Organization Structure.
• It is a tree-like graphical representation of the organization, starting from the head of the organization at the top and the hierarchy below him shown downwards.
• As the name suggests, it is used to properly communicate the work and reporting relationships within the company in an organized and structured manner.
• Everybody on the roll of the company must be represented in the organization structure.
• In an organization structure, the person shown above is responsible for guiding and supervising the person(s) below her.
• The persons below are responsible to fulfill the work given to them and report the status to the person above.
• The reporting relationships must be determined very carefully. People’s seniority, experience etc. must be considered while deciding these relationships. If proper care is not taken in deciding the reporting structure, it may give rise to a lot of conflicts within the team.
• Ideally, every employee in the company must have one position in the organization structure. This means that there should be only one boss for every employee. Nobody in the company should have more than one reporting boss. If it is so, it creates a lot of confusion.
• If functionally a person performs multiple duties which fall under two or more departments, she may have functional reporting to more than one bosses, but her administrative boss must be only one. This administrative boss should be the one who may grant her various permissions like leaves, reimbursement of expenses etc.
• The senior positions must be given to the persons with leadership and people skills along with the requisite technical skills and relevant experience. If the persons at higher positions lack leadership and people skills, they will eventually be ineffective in those supervisory roles. If these skills are not possessed, we must try to develop the same in them through proper training and coaching.
• The organization structure must be revised as and when the manpower changes occur within the company.

(Expert advice to GROW your business wherever you are, whenever you want.

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