Organizational Framework is an outline depicting the authority and communication guidelines followed by a company. The organization Framework usually includes different policies, rules and regulations along with responsibilities assigned to each position inside the organization. There are several critical factors that affect the organizational structure of a company. The factors affect the organizational structure can be either internal or external. The Organization Structure for a company is created by a business consultant or by the people inside the company.
Size of the Company and Organizational Structure
While in the case of small and medium sized companies the business owner is responsible for the organizational structure in the case of large institutions size is a major driving factor. Big companies need a more elaborate organizational framework for the regular operations. This is required because there will be many managers required for the supervision of employees.
Business Strategies and Organizational Structure
The strategies being adopted by a company can be of importance in developing an organizational structure. If it is easy to change the organizational structure depending upon the business strategy changes the company can attain higher growth. However, in such cases business owners may feel unwilling as the overall control of the business might be lost. In the case of a Small business organization, much delay is caused by forming an organizational structure change. Some companies might be interested in creating and implementing different business strategies without making any changes in organizational structure.
Business Environment and Organizational Structure
Several external factors concerning the business environment may also influence the Organizational Structure. In the case of a dynamic environment the behaviour of the consumer changes frequently the organizational structure may need a change while in the static environment changes might not be required. In the case of a dynamic business environment companies might find it difficult to adapt to the changes by the demand of the consumers.