Overview:
The
corporate structure of a company, also referred to as organisational structure,
is an important component of any business entity which determines the flow of
communication, authority, and responsibility in an organization. A company's
corporate structure has a huge impact on its success, on employees performance,
and on other factors. For example, if we look at Intel corporate history and structure, it has always been about
innovative approaches where any level of employee is allowed to give his/her contribution
in the company's innovation policy and strategy.
Impact of Corporate Structure on Employee Performance:
There
is no doubt that corporate structure has a direct impact on the performance of
employees. For example, in a tech company like Intel, where continuous
innovation is needed to keep up with development in the market, the role of
employees is crucial. Since the time of Gordon
Moore itself, Intel has focused to keep a balance between corporate
structure and employee performance, giving employees the freedom to innovate
and express their opinions on strategy and policy of the company. A well
defined corporate structure like formal hierarchical structure benefits the
employee performance, by clearly defining the roles and responsibilities, as
well laying out the boundaries of authority. The vice-versa can affect the
employee performance drastically. According to a research, employees preferred
for them to experience job satisfaction. 8% of the respondents opted for
centralized decision making, 36% indicated that there is a need for
decentralized decision making system, 52% responded that group decision making
would help workers in achieving job satisfaction and remaining 4% responded
that individual decision making would help workers in achieving job
satisfaction.
Impact of Corporate Structure on Company’s Performance:
Different
corporate structures have a varying degree of impact on a company’s business
performance. Hierarchical corporate structure has its own pros and cons with
regard to business performance. Quick, low-cost decision-making and flexibility
increase because of hierarchical structure. While too much dependence on the
top level for decision making is something which is a major concern in a
hierarchical structure. On the other hand the matrix structure allows
accountability and responsibility at different levels, but it is a complex
structure in a big organization, like big tech companies such as Apple, Intel, etc.
Impact of Organizational Structure on Business Productivity:
Organizational
structure is what groups people in a certain way. There are various factors of
organizational structure which affects the business productivity. Some of these
factors are functional structure, divisional structure, team structure,
influence of managers, level of creativity, growth opportunities etc. All of
these factors contribute in determining the productivity of a company.
SUMMARY:
There
is no perfect corporate structure. Every organisation should adopt the
corporate structure which suits their business, employees, and stakeholders. If
the corporate structure is incorporated without keeping these factors in mind,
it can have drastic consequences for an organization.
