Business Studies

Business Studies
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Business Studies
Introduction
An organizational structure can be described as a hierarchical arrangement of lines of power, channels of communication, rights, and obligations in a business (Shtub and Karni, 2009). In simple terms, an organizational structure decides how roles and obligations are allotted, controlled, and facilitated, and how information streams between the various levels of administration. An organizational structure relies upon the business’ strategies and objectives.
Problems of running a business without an organizational structure
Maintaining and running a business without an organizational structure can prompt miscommunication because employees will not be certain of who needs information or where to send critical messages. For instance, a business manager at a business may come up with a sign up form for new or existing customers to help new customers begin requesting for goods with less effort. He/she might get the approval from the owner of the business. In case the business’ accountant is not aware of this form, he/she would not be able to know how to qualify new clients for credit or receipt them appropriately. This could result in delayed order payments or having to wait long for payments from clients. This could bring about clients not getting requested products, forcing them to desert the business.
Hjorth (2012) argues that to expand a business' potential, as opposed to just sitting and waiting for new business, businesses should make arrangements for the future and create opportunities. Critical to the discussion is the fact that without an organizational structure that puts key officials or representatives together all the time, it would be a daunting task to design functional long-term strategies. A long term strategic management technique may include experiencing development through goals, for example, presenting new products, utilizing new circulation channels, growing geographically or pursuing another target market. These strategies frequently require information from departments like production, marketing, human resource or information technology.
According to Hill and Jones (2014), at the point when a business has not set up an effective organizational structure or does not cultivate imaginative strategic management, it can miss opportunities, allow issues to persist and lessen employee spirit. A worker who has two bosses may get clashing directions and not have any desire to take after either until he/she gets approval from a higher authority. When workers are not happy with what they do, they are unlikely to volunteer new thoughts or may leave for a better job. Lack of an organizational structure is likely to lead reduced productivity and thus a decrease in the potential for growth. For instance, when salespersons are not in communicating terms with fellow production managers on issues such as bulk orders they are aware off, the department in charge of production is faced with a challenge of preparing scheduling plans. This leads to decreased production capacity unavailability of labor, lack of warehouse storage space and shipping difficulties.
Formal and informal st...