Tips for Building Organizational and Management Structures

published in: Leadership

26 Feb

While reviewing one of the first books on management, which I read as a student, I found many good recommendations for building a management structure:


The organization must be structured bottom up, starting from the customer.  If work flow on the lowest hierarchical level is structured according to customer’s needs, it is more logical, more satisfactory and involves greater personal responsibility.

Communication conductivity management structure, organizational structure

Organizational management structure must not consist of a great number of managers, subordinated one to another.  It is recommended to have no more than three hierarchical levels between the CEO and the employee.  The longer the communication chain is, the more likely it is the CEO’s message to reach the employee significantly modified.


Management structures must be simple, with clear separation of rights and responsibilities, which provides an opportunity for timely respond.  It is recommended to build flexible structures, where the contents of the work is changed periodically, duties and responsibilities are not constant forever and the employees are expected to provide work process and climate improvement proposals.


The structure must contain minimum management levels with a minimum number of people within.  Each company is pursuing its primary objective, which is under the influence of external and internal environment changes.  Management structure should follow these changes, so that there can be no single correct structure.  Probably the most important rule here is that any organizational function must be in tight correlation to the primary objective.

Manageability scale

The manageability scale reveals the number of direct subordinates to a manager.  Each additional subordinate leads to an increase in the number of possible work links (direct, sole, direct group, crossed). Using V. Greykunas’ formula - k (2k-1 + k-1) - we calculate that six subordinates are subject to 222 links, eight – 1080 links, and ten subordinates – 5210 links.  The recommended level of manageability for the top management is 4-6, and for the lowest level managers - about 8.  The scale of manageability depends on the tasks complexity, managers’ skills, communication type, employees’ and manager’s location, the work process, the maximum damage on an error, etc.

Consistency between formal and informal status

It is advisable to have a certain degree of overlap between formal and informal structure, between the formal and informal leaders.  Very rarely, there is a match between the formal and informal status of a person.  Researches show that most pleased people are the regular members of small teams with average team results and medium group status.  Hence the general recommendation is to form small groups on specific problems and projects.
Focusing skills and efforts

The organizational structure must not allow people responsible for one department to interfere in the work of another. Tasks of different departments should not contradict each other.

Control efficiency

The controling system is more effective when it is based on shared corporate values (corporate culture), not just the on the standard methods.


Excessive tutelage is harmful. Autonomy is what we want to develop in our managers and subordinates.

One-man management

Employees with homogeneous functions should be headed by a single manager.  There should be no employee with two managers.

Constant readiness for change

The strategy should be reviewed often enough by the key managers and adapted when needed.  The organizational structure should always be prepared for a change in support of the newly adapted strategy.  The strategy determines the management structure and not vice versa.


Regardless of the management structure type, always follow the management principles, formulated by Henri Fayol: authority and responsibility, discipline, corporate spirit, initiative and unity of the workforce, fair remuneration, the group interest should prevail over the personal interest, undivided authority.



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