How Do I Develop an Effective Organizational Structure?

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  • Written By: K.C. Bruning
  • Edited By: Susan Barwick
  • Last Modified Date: 09 November 2019
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The process of developing effective organizational structure begins with acquiring a good understanding of the organization. This typically includes comprehension of the company’s goals, values, and vision. It is also often valuable to consider elements such as overall company culture and history, in order to determine what methods tend to work best. With this information, it is usually possible to decide whether the organization should be one that follows a more traditional leadership model or if responsibility would be best dispersed among various departments.

Once it is clear how the company is currently organized, it is advisable to find out which elements are blocking its success. The goal is to determine whether the current overall hierarchy is functional or if a complete overhaul is necessary in order to attain an effective organizational structure. For example, a company may be struggling to stay afloat because its employees do not work well with traditional leadership. Productivity and efficiency may increase if the structure is shifted so that lower-level employees have more control over their work.


After the most effective organizational structure for the organization has been determined, that system can be gradually introduced to the company. If an adequate structure is already in place, then it can be fine-tuned for maximum efficiency. Before making any major changes, employees should be educated as to how the company structure will be re-organized and why. It is often wise to include employees in the process of building this structure as they will all need to support it in order for the system to work properly.

External factors can also play a part in developing an effective organizational structure. This may include competition, market conditions, and the state of the overall economy. The process of determining the most effective way to organize the business will typically include some acknowledgement of these elements. This is primarily because these factors can alter the nature of an organization by changing the way the work needs to be approached.

Organizational structure can be developed both for new and existing businesses. It can be used as a blueprint for a company and integrated into the core values and goals before it is implemented. An organizational structure can also be redeveloped in order to help a company adjust to changes in the economy and internal work force. Reorganization may also be used to attempt to save a failing company.


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