Let’s look into all the details of organizing the company structure and find out what tools can help.
When management theory says that planning is one of the most important functions of any manager, many people have a poor idea of what they are talking about. For example, how a manager thinks through the details of some new task and assign it to his subordinates for execution. But what if there are no subordinates yet? There is no company at all, and it has yet to be designed, planned, launched?
This is called organizational planning, in other words, building the structure of the company. It is good if there is only one company, but what if there are several companies? Organizing the structure of a group of companies will be much more complicated.
Organizing the structure of a company — the importance of the process:
Every company should have its own goals and objectives. A company is a kind of system that consists of intangible (human) and tangible (equipment, premises, money, etc.) resources.
And only their correct distribution can lead to the desired result. Business does not tolerate mistakes. Any managerial decision is important, and if this decision concerns the structure of the company and the organization of work, it has the highest priority. The development of further events will depend on it.
The key importance is not only the existence of certain positions and the description of their functions, but also the description of the links between these or those employees:
- Who reports to whom, in what matter
- With whom and on what issues they co-operate;
- Who is responsible for what;
- What tools and resources are at their disposal;
- Who replaces them in case of absence.
With the help of planning the structure of a company, the manager can build the work of the entire enterprise and/or its individual structures in particular: divisions, services, departments, etc.
The clearer and more correctly the composition of structural units, distribution of their responsibilities, level of nesting and subordination, tasks to be solved, etc. are defined, the more efficient the company will work.
What Types of Organizational Structures Exist
During its existence, mankind, and management in particular, has tried all popular and unpopular models of management, principles of building structures and their content.
Now the manager, when creating of a new company, only needs to choose one of the most suitable models for a sample and adapt it to the peculiarities of their business.
What kind of organizational structures can be:
- Linear;
- Functional;
- Linear-functional (as something in between the first two);
- Divisional;
- Flexible (adaptive).
When dividing by the degree of centralization of power, centralized and decentralized are distinguished.
Peculiarities of Linear Structures
Everything is simple here — a sole leader builds a direct (linear) vertical of power downwards, such a structure is also called «pyramidal». Each level of the hierarchy is strictly subordinate to the superior management.
This is the simplest and most logical scheme, which is easily scalable and does not allow double decisions. There is always someone to have the last word — the one at the top of the pyramid («food chain», as some managers joke).
Pros of linear structures:
- Clear and understandable links between all participants in the system. An employee always knows to whom they report.
- Managerial decisions are made quite quickly, as in fact one person is responsible for this function.
- Systems with a clear hierarchy respond quickly to instructions from leaders.
- Each employee has a strictly defined area of responsibility.
Cons of Linear Structures:
- The more levels of hierarchy, the more complex management decisions reach the final executor, and the more managers the ordinary employee reports to.
- Strategic planning is usually handled only by the head of the company, hence the high load on them and the increased demands on their knowledge and qualifications. He literally must know and be able to do EVERYTHING. Therefore, the high probability of miscalculations and inaccuracies in individual business processes.
- Hierarchical structures are poorly adapted to significantly changed external conditions.
Peculiarities of Structures Close to Linear Structures
Linear structures can be traced in some parts of nonlinear ones, and this is normal, since a clear hierarchy always wins in operational tasks.
Such structures are called «bureaucratic», in addition to linear, they can include:
- Functional. Here it is assumed that management bodies are divided accorting by certain functions, for example, the head of the production department, sales department, marketing department, etc. The same employee may sometimes report to different managers simply on different issues.
- Linear-functional. In fact, a mixed structure, in which there are areas of linear and functional management and subordination.
- Divisional. Here, within one organization, autonomous separate divisions are allocated. Divisions can be created according to different features: functions, products, geographical location or selected market.
Who and How Determines the Organizational Structure of a Company
In planning, the dominant factor influencing the need to introduce a new position in the company is the amount of work to be done. Of course, the amount of work to be done must be taken into account in relation to the qualifications of the employee.
The work is directly related to the tasks to be performed. Tasks can be episodic or periodic. Normally, all tasks and functions of an employee should be described in their job description.
The structure of the company is determined by its head. They, in turn, may be subordinate to the decisions of the owners. Sometimes the management body may be collective. In this case, a responsible person is appointed, and the proposed plan is already agreed upon by the majority of board members (with the relevant decisions documented, for example, by the results of a regular or unscheduled meeting).
At the same time, the type of structure is not influenced by the company’s activities. Most often it depends on the size of the organization. For example, the organization structure of a construction company, as well as insurance, legal, or logistics can be linear, and functional, and divisional, and adaptive. There are no rigid criteria for the breakdown. The main thing is to describe the developed structure in orders and other governing documents, including founding documents.
What Tools Can be Used to Build the Organizational Structure of a Company
For simple projects, it may be enough to use a notebook or any other handy tools (as you like).
But the more complex the structure becomes, the worse it is visualized, which means that some details of planning may be missed.
We offer to comprehensively close the issue of managerial work with the help of Projecto service.
Here you can not only plan the structure of your future company, but also:
- Create accounts for all your employees;
- Set tasks and control their fulfillment;
- Manage projects;
- Collect all documents and files of the company;
- Systematize the work of notifications and alerts about important events;
- Search for necessary information in all sections.
- Conduct business correspondence within the company and with partners.
This is an ideal organizer that works in the format of an online service. It is suitable for companies working in any field (logistics, construction, insurance, etc.).
How to Create a Company Structure in Projecto
We provide the most flexible methodology used in businesses of different sizes — based on services or departments, with any number of managers and employees.
- Authorize in the system and go to the «People» tab.
- Create your own company if you haven’t already done it. You will need to specify its full name and TIN, and think of a letter designation (used for labeling letters). TIN and letter designation are optional parameters.
- Create a new department. You can assign for it a superior department (by subordination), a manager or managers, if necessary, add the names of the necessary positions (up to 100 characters per name), specify phone numbers, for example, internal PBX, e-mail addresses, and select a location (link to one of the offices).
- Done.
Now the created department or service will be displayed in the visual map (structure) of the company.
You are not limited in any way in the number of nesting levels of departments or in the number and names of positions within one department.
When creating a new employee profile, it is left to correlate it with the selected department. The same employee can have several positions within one or several organizations.
What Else You Can Do With the Company Structure in Projecto
The main department in the structure is a mandatory element. You cannot delete it, but you can customize it as you want. You can change its name, select another manager, remove an existing manager, etc.
Within a department, you will see all employees assigned to positions. You will also be able to quickly get to managing their profiles.
When you are on the card page of a particular department, you will be able to view:
- the tasks of all employees belonging to that department.
- department events.
Tasks can be viewed in a list, as a kanban board or as a calendar schedule. They can be filtered by different parameters and exported.
When adding a new task from a department card, it will be assigned to the head of this department or service.
A department can be deleted only after all its employees have been removed or transferred.
