How Do I Develop an Organizational Structure Plan?

D. Nelson
D. Nelson
A CEO is usually the head of a company.
A CEO is usually the head of a company.

An organizational structure plan is a strategy that governs how a business is run and how work is distributed. To develop an organizational structure plan, you first need to determine which kind of governance might best suit your needs. Some factors to consider when making this decision are the size of your enterprise, the number of locations, and the nature of your industry. When creating a plan for a large corporation, the views of shareholders and investors also affect which government model is best. Smaller businesses with few than 10 employees might not need to organize a plan.

It is helpful to research structure plans used by other businesses in your field. Make sure that these businesses have been successful. It also is important to learn about any government regulations that might affect your organizational structure plan. Management models might have to be designed in certain ways for compliance.

For businesses of small or medium size, the best organizational structure plan often includes a Chief Executive Officer (CEO) who oversees operations of primary departments. He or she might make final decisions regarding finance, production, and marketing. Leaders of each department then oversee their respective functions and ensure that related processes are helping to achieve company goals.

Another common organizational structure is for businesses that have many locations. There also is a CEO in this strategy, though instead of structures that are based on departmental functions, these structures are based on individual locations. Each location might be responsible for its own finances, regional marketing, and recruiting.

Businesses such as large retail stores or manufacturers might instead choose to create structure plans based on individual items or services. For instance, an organizational structure plan for a department store might have a president or CEO overseeing departments such as clothes, hardware, and pharmacy. If a business with this kind of structure also has a number of different locations, the best organizational structure plan might include elements of several plans.

Once a basic plan is designed, you should discuss with your partners or colleagues how work should be distributed and how different departments might communicate with one another. Many businesses have information technology (IT) professionals who design networks. Software for general workflow should be chosen and implemented.

Many managers believe that an organizational structure plan should undergo continual improvement. As new challenges arise and as a company grows, it is common for its organizational structure also to change. Events such as expansions, mergers, and acquisitions commonly require the design of new plans.

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    • A CEO is usually the head of a company.
      A CEO is usually the head of a company.