The Purpose Of An Organisational Structure Commerce Essay


Organisation structure is based on hierarchical concept which subordinate of entities that negotiate and contribute for a one common target. Any organisation contains many various entities. Objectives and ambiences manage the set up of an organisation to make an effective and successful organisation structure. As a matter of fact the structure of the organisation has a capability of determine the modes which operates inside the organisation. An organisation needs all the structures to make them work efficiently. It is believed that the effectives of organization based on its structure(1) In this essay I'm going to explain how the organisations are built and how they are enabled to work effectively. Organisations are unique with each other as each organisation has its own history and culture. Most businesses have started with small owner and then they knew how to develop their organisation for success in efficient way. It is more appropriate for ideal and well organized organisation to make an structure as it is more responsive in decision making and receptive to changes and also to favours freer flows of getting ideas and information(2) So that the structure of an organisation has been built and modified as they needed. The business or organisation will be success by having a creative, efficient and effective structure for the organisation. Subsequently they will be able to achieve their goals and achievements by having a suitable structure for the organisation (Stimpson et al.2000).

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When businessmen designing a structure for an organisation there maybe delegation procedures too. In this case the owner or someone who responsible for the organisation should choose an ideal person to delegate the business. Formal organisational structure is synonymous with after the fact performance measures. This is managed by internal members or benchmark comparatively. (3) And also delegation affects the weaknesses and strengths of the organisation. By considering above details an organisation whether conducted by the manager or delegated person (Stimpson et al.2000).

Why all organisations need a structure?

Organisation structure is one of internal and formal framework of a business. Which shows the way how authorities are transmitted and the management is linked together. Accurately maintained business structure is one that is basically built on departmental lines. It depends how the department is divided according to creativities, actions or what type of work carried out. Organisation charts make an image and those charts can illustrate the structure of the organisation. Organisation design is a formative process of organisational forms(5). As well as these structures explains a function orientation which has many levels of hierarchy and which can be emphasized for decision making inside the business(6) These kinds of charts are important for any of organisation no whether they are small or big. The organisation charts imply about the overall responsibility of the business for decision making and the relationship between different departments and the people who involved to the organisation or business (Stimpson et al.2000).

Organisational structure can be divided to many models like tall/flat, formal/informal, centralised/decentralised, organic/mechanistic etc... In this essay I'm going to give a brief introduction about how the formal and informal model acts and how does it effect for an organisational structure for the success of it. As well as how the formal and informal model is useful to achieve goals, objectives and the strengths, weaknesses which cause to the organisation by u sing this model (Stimpson et al.2000).

Formal and informal organisation

Formal organisation

A formal organisation strictly controls the facts that happen within it. All the activities in the organisation are grouped into departments. These departments work mainly divided into two categories named roles and role interaction. These two main categories are well defined under formal organisation structure. It's a common thing what they are doing and with whom they work. There are some cross activities in these kinds of departments which are take place for the success of organisation. (Stimpson et al.2000). The cross activities of a department like Specialize things effectively and the division of labour should certify that the people work inside the organisation are experts and there is a minor possibility of occurring mistakes and errors and also there should be accurately established procedures which ensure that the possibility of happening errors is under controlled and those errors are dealing with a set way. Formal structures are very important because it suppose to be that any organisation should be designed formally with their cooperative ties. (7) Communication methods should be exquisite and thoroughly tested to work properly and effectively is one of another cross activity (Stimpson et al.2000).

Benefits of the formal organization structure

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The formal system is blended of the organisation considering about formal structure of a business. The organisation will be able to obtain lighten management workload by using formal structure for the organisation or business. Also it has an ability to fill gaps in management abilities. As well as the most important thing is the formal structure of the organisation act as a safety value for the business. Not only that the formal structure can encourage improved management practise of the organisation. (


Considering about formal organisation structure they can improve their procedures for the success by using the balance of the demand of the day which is related to the demand of the project. As well as they can manage competing important ranges and the priorities that should be given immediately. Using "change fatigue" method which helps the staff to corporate what is seen inevitably as yet changing for another. And the satisfaction of the business which can be changed fast will also get things right for the success of the business. Motivate stakeholders. Whose input is critical to the project which is not ideal to continue the project. But these stakeholders don't report these facts to the business. If so they should be motivated to avoid from the risk for the organisation. Efficiency and working effectively with other employers who are inside and the outside from the business. Individual decision making and studying its quality mainly cause for a good structure for an organisation.(8) Giving a perfect leadership about how and when to push and let go things using time management (Stanford 2007).

Bruno Magli, a high-end shoe company

Aaron Schwartz who joined to this company wanted to redesign the organisation and also the leadership skills to continue the organisation in effective way to achieve goals of the organisation. He decided to change the structure of the organisation in formal way. To do this he took some certain changes for the company like motivating stakeholders and working effectively with other leaders. He has used timing right on leadership issues. Finally he decided to corporate with what, inevitably, seen in any other change. In this way he decided to change the business formally. Subsequently Bruno Magli Shoe Company's US arm started doing well which is launching the sales successfully. As a matter of fact their sales in the year 2005 are $35.8 million out of 50% worldwide sales and after two years they have moved onto Polo Ralph Lauren (Stanford 2007).


Not only advantages there are some weaknesses as well in the above company which they have to manage when they are going for their success. The difficulties of identify and asses what is going on outside of the organisation environment and also it is unable to meet all stakeholders and to get their ideas. Not only that when we considering about a project maybe they disagree and non finalizing things like context and boundaries which are related to the leadership role of the business. As well as they are unable to manage the realistic view of the project in the context of all related works and their time demands.

Informal organisation

The informal organisation implies and creates very broad roles. These roles allow the participants to work out what should do, when and by whom. In this organisation system actions inside the business won't be predictable as it depends on the people who worked in and related circumstances. Any kind of organisation must have elements of this as the informal relationships are bound to develop in any business because of the growing of the business or an organisation. Such as work groups, friendship groups and interest groups. Creating informal groups can be used very effectively as they contain many advantages for the business. Whatever it maybe these grouping system may cause for severe problems and difficulties in that they may pursue elements and objectives that are already conflicted with the organisation (Stimpson et al.2000). There are certain functions of informal organisation models like perpetuate the values (social and cultural) that the group holds friendly, and also this kind of models have the ability to provide satisfaction and social status which can't be obtained by formal organisational structure models. They also promote communication facilities among the members of organisation. Influencing and regulating behaviour is provided by them inside and the outside of the group (

Potential costs and benefits of informal groups.

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There are certain benefits of informal grouping like easy communication facilities through the unidentified leader who is in one side can bring the group along as well as the group can be more powerful in one side when the objectives are met. Not only above benefits has in informal group but also there are valuable costs in these grouping system like objection to change the group. Especially where the change will break the related group up or threaten objectives and these objectives may develop hostile of the business. And there may be difficulties to control and monitor the objectives inside the group (Stimpson et al.2000).


There are some facts in informal organisational structure which followed the business for the success like regarding highly for the competence authorities, high ethics and integrity, calm less and effective less in crisis, not using outspokenness and candour, manage giving admission for errors and failure and also achieve those errors and failures successfully, using widely political orientation and the ability to manage the origination without an authority. In the other way their strength will be more powerful by standing up for values and beliefs. These above condition may cause to launch and precede the organisation for their success (Stanford 2007).


Considering about informal leaders they should have an ability to support their referent power and their approaches. If they can't achieve these two main necessities they won't be able to win their objectives and they will have to face for some certain difficulties and failures about their organisational structure like they have to take the support of subordinates. This is a poor management for an organisation. Dislike of poor quality, lack of political orientation, standing up for beliefs and values, high ethics and integrity, calmness and effectiveness in crisis, disability to influence without authority, law regard for competent authorities, candour and outspokenness, weaknesses of sharing their victories and a sense of fair play occurring errors and failures. Above facts directly cause to the business for its failures (Stanford 2007).

There are some leaders who have a certain doubt about whether they can win or loss from any proposed organisational structure. And also they will get any action to save their own interests when considering about organisational expense. Because of the above reason formal leaders face daunting challenges which can be met when they maintain and lead their organisation for success (Stanford 2007).

How (NASA) has achieved their goals and objectives

The space-shuttle programmer of NASA, WAYNE HALE has got an effort to get the shuttle flying again that is the in charge of NASA. HALE talks about the Columbia space shuttle disaster and then how they have achieved that problem in the year 2003.

WAYNE HALE stated that they dropped the torch through their complacency, their arrogance, self-assurance, sheer stupidity and through continuing attempts to please everyone. And it is time to adjust their thinking (Stanford 2007). Three years later the following organisational structure of NASA discovery was succeeded on 4th of July 2006. They further said that they are back to space station assembly to shuttle flights but they are still going to watch and give the pay attention for that launch and also they are not going to let their guard down. Subsequently they used the shuttle to finish the international space station by 2010. Then they are planning to develop the exploration vehicle by the year 2014. Also return humans to Moon by 2020 and then move to Mars-albeit at the expense of other NASA projects. GRIFFIN in a press briefing in Washington, DC that the NASA simply cannot afford to do everything that their many compilers would like use to do. According to the above case study it is clear that having a well-defined structure for the organisation will proceed for its success (Stanford 2007).

Whistleblowers Company

These organisation members say that the legal front and blowing the whistle may cause for a risky business the advocates of the organisation say that the relation will not occur always. But they further said that the whistleblower should anticipate these occur. KRIS KOLESNIC says that the whistleblower will get troubles even though they have a protection for the organisation, because of poor organisation structure. He further said that the employers of whistleblower who appear gratefully for the confession, because they think that it will be a great asset to get rid of the whistleblower (Stanford 2007).


Considering about all above details it is clear that the formal organisation structure is ideal and it is better than informal organisation structure. As a whole many successful organisations used to follow formal way for designing a business. It is clear that the formal way of business design is much better than informal structure as it contains effective facts as I mentioned above as evidence. By the way we can't say the informal organisational structure is not ideal for designing business either. As they have also some certain ways how they can achieve their goals and objectives although they have wide possibility to becoming failures and unsuccessful of the business. In the above essay I have mentioned how organisations can obtain and achieve goals by using formal and informal way of designing an organisation. Also I have mentioned what are the weaknesses and strengths of these two forms which I have mentioned early. Anyway it is compulsory to have a structure for an organisation whether it is formal, informal or centralised, decentralised etc....without having a certain form of organisation structure the business may become failure and they won't be able to achieve goals and objectives.