The organizational plan is the platform from which you structure resources and control work. In this case, you need to structure your business story. Structure (as opposed to no structure) provides a framework or template to accomplish a number of functions within your business. Organizations work better than mobs. Since the first people banded together to fight saber-toothed tigers, they came to a realization that working together has more rewards than independent actions. By coordinating the task at hand, more efficient use is made of the mob’s total resources. From the concept of division of labor came the next logical step. Those groups of labor must be coordinated in some fashion. The hunters must be coordinated with the gatherers who must be coordinated with the camp watchers. Thus, the primitive functions of organizations began.
Alfred Sloan of General Motors is given credit for being the first to really perfect the concept of the corporation as an organizing institution. He did for organizing management what Henry Ford did for organizing the production line. His idea of decentralized work under semiautonomous operating units, but with rigid and formal command and control, became the standard of business. Sloan’s concept of having a group of managers formally directing workers, while cold and impersonal, was quite sophisticated for its time.
The five purposes of your organizational structure are to:
1. Organize work.
2. Provide a resource vehicle for the implementation of strategies.
3. Match headcount to responsibilities.
4. Create a place for employees to experience belonging.
5. Control costs.