Organisational structure basics

The way in which a business is organised has a direct effect on its competitiveness. For a business to be able to achieve its aims and objectives, it needs to organise its people in a suitable way – that is known as the “organisational structure”.

The organisational structure of a business is important because it determines:

• Authority and responsibility – who is responsible for whom and who is in charge?
• Individual job roles and titles
• The people to whom others are accountable
• The formal routes through which communication flows in the business

One way to think of the organisation structure is of an explanation of the “command and control” system in a business.

The organisation structure of a business will depend on several factors, including: