Factors influencing the choice of organizational structure
Organizational structure is the framework companies use to outline their authority and communication processes. The framework usually includes policies, rules and responsibilities for each individual in the organization. Several factors affect the organizational structure of a company. These factors can be internal or external. Small business owners must be responsible for creating their companies organizational structure framework. Business owners may use a management consultant or review information from the Small Business Administration before setting up their organizational structure.
Size
Size is many times the driving factor for a company & organizational structure. Smaller or home-based businesses do not usually have a vast structure because the business owner is usually responsible for all tasks. Larger business organizations usually require a more intense framework for their organizational structure. Companies with more employees usually require more managers for supervising these individuals. Highly specialized business operations can also require a more formal organizational structure.
Life Cycle
The company’s life cycle also plays an
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