There are two types of organizational structure at small and medium based companies based on functions and products. The functional structure is followed when the reporting to higher authorities is based on the functional areas. Product based organizational structure is followed when there are many products being manufactured by the company.
For the purpose of decision making it is essential for companies to have an organizational structure. Some companies have permissions for employees to directly report to the top management team whereas in some organizations the questions are reported to the authority just above the organizational structure. There are several advantages and disadvantages for such structure and the time consumed and decision taking term are concerning factors for the management.
Depending upon the organizational structure communication among the people inside the company varies. distribution of work and authority is possible through the division of workforce through the organizational structure. Communicating with the superior just above is easy and the employer will be having a clear idea about what to be reported and what can be done while taking decisions. If further clarifications are needed the higher authorities can be consulted without disturbing the mask pattern at a lower level.
Organizational structure helps the performance among employees for evaluation. It is possible for the superiors to demonstrate the skills of the employees and how employees are getting along with each other. Depending upon the performance the payment scale and appraisals can be worked out easily.