Organizational Structure and Culture

Most people understand and accept that in order for any business to function with any degree of success there must be some sort of structure in place. There are various business structures that are typically followed and are determined by the size and type of the actual company. However, what some people overlook is how important the organization’s culture is for continued growth and development.

The type of organizational structure and culture associated with a business can have far reaching ramifications for how well that company performs. Many small businesses operate with a flat organization structure because there are very few managers between the staff and the owner. In some cases, the owner actually works as part of the basic staff for much of the time. Larger corporations tend to use a more formal structure such as the functional approach where everything is arranged in departments and based on some sort of hierarchy.

The specific structural type is somewhat irrelevant when discussing organizational structure and culture. The composition is in place to provide a formal and inflexible construct to help maintain order. This is used to determine the various job responsibilities, employees’ formal rights, and to establish a system of rewards and consequences. The organizational structures determine exactly how the company will operate and why.

The culture of the company is a different matter altogether, but still very vital to guarantee a profitable enterprise. The culture tends to be very informal and flexible because it changes as people come and go in the business. Many of the cultural aspects of a company are passed through word-of-mouth instead of formalized in bylaws or memorandums. The people let each other know how they want to work together and how they want to be treated.

The culture determines what a good employee does compared with what a bad employee might do. This isn’t something that can be contained within the formal structural documentation. It’s the culture that dictates what the role of the person in the position set by the organizational structures will actually be.

For example, the structure says that an employee is responsible for making sure all of the shelves in a store are always fully stocked and neatly arranged and to provide assistance to customers as needed. It does not tell the employee how to handle that one touchy customer who only wants to deal with certain staff…the culture does.

The organizational structure and culture are very important because ineffective leadership can ruin a great enterprise. You only need to remember the Roman Empire was brought down by a series of terrible rulers. But even with great leadership, everyone also needs to feel vital and respected which is all tied up with the culture created by the structure of the company.

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