Organizational Structure: How Firms Establish Their Boundaries

Organizational structure related to how the firms arrange their divisions. Small firms have flat organizational structures with little managing levels. Huge firms using tall organizational structures with lots of levels of superiors and workers. Businesses use different styles of organizational structure for certain functions. For example, firms using a geographical organizational structure reorganize number of rules like marketing because of variable needs.

There is a role of organizational structure that is efficiency. Furthermost businesses want to have the greatest distinguished resources. Copying raw materials or work activities is inefficient and useless. Accordingly, a firm will build its own organizational in regards to goods and services

the education system or a complete school system. Similarly, systems can be chosen and defined at different levels and can operate alongside each other as well as hierarchically; e.g. the finance system, the decision-making system, the accountability system. An organization as an entity can suffer systemic failure. This occurs in the whole system or high-level system where there is a failure between and within the system elements that need to work together for overall success. Factors in systemic failure may include confused goals, weak system-wide understanding, flawed design, individual incentives that encourage loyalty to sub-ordinate (rather than super-ordinate) goals, inadequate feedback, poor cooperation, lack of accountability, etc.

The entire successfulness of a system demands a performance management system that is discarded over the level of individual systems and their practical control. Characteristics might contain group or team-level goal setting, improvement, motivations, communication, assessments, rewards, responsibility. The goal is to emphasis on what links people together and what links systems together rather than working as well as managing performance.