Organizational Structure 

An organizational structure is the pattern or arrangement of jobs and groups of jobs within an organization. This pattern pertains to both reporting and operational relationships, provided they have some degree of permanence. The individual elements of an organization structure typically include a variety of components that Leonard Schlesinger termed organizational "building blocks": 1) departments or divisions; 2) management hierarchy; 3) rules, procedures, and goals; and 4) temporary building blocks such as task forces or committees.

Ideally, organizational structures should be shaped and implemented for the primary purpose of facilitating the achievement of organizational goals in an efficient manner. Indeed, having a suitable organizational structure in place, the one that recognizes and addresses the various human and business realities of the company in questions is a prerequisite for long-term success.

But as Gibson, Ivancevich, and Donnelly noted in Organizations: Behavior, Structure, Processes, “It is entirely reasonable to acknowledge that in many instances, organization structures do not contribute positively to organizational performance because managers are unable by training or intellect to design a structure that guides the behavior of individuals and groups to achieve high levels of production, efficiency, satisfaction, quality, flexibility, and development." Small business owners seeking to establish a beneficial organizational structure for their enterprise, then, need to recognize that the process is a complex one that requires considerable planning and research.