Progression for developing an organizational structure:
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Clearly define the objectives to determine the type, stability, and basic characteristics of the organization: Every organizational structure must begin with well-defined objectives. These goals determine the kind of structure that will support them effectively.
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Enumerate and group the activities of the enterprise consistent with the determined objectives: Once objectives are set, the next step is identifying the specific tasks needed to achieve them. These are grouped into categories or functions.
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Assign the grouped activities to personnel. Similar functions should be combined into one position: After organizing tasks into functional groups, they are allocated to specific roles or individuals. This establishes job responsibilities.
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Determine the span of supervision, the types of organization, the basis of departmentation, and pattern of authority structure: With roles defined, the organization can now design its hierarchy—deciding how many people report to each supervisor, how departments are arranged, and how authority flows.
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Assess the capacities and abilities of human and other resources at the disposal of the enterprise. Adapt the organization in sync with the reality: Finally, align the organization to real-world limitations and resource availability.
This sequence ensures that structure follows strategy and resources are considered after a framework has been logically designed.