- June 21, 2021
- By Joshua Reid
- Company Structure , What is...?
- company structure , infrastructure , organization , structure
What is Organizational Infrastructure?
Organizational Infrastructure (in the business world) is “used to define its hierarchy. Each employee’s position is identified, including their function and who they report to within the firm. It is the way in which a company or organization is organized, including the types of relationships that exist between the directors, managers and employees” (Market Business News).
In layman’s terms, organizational infrastructure is the method by which employees, managers, CEOs, and other members of the company interact. Additionally, organizational infrastructure also includes any agencies, educational facilities, charities, etc. that the business operates. According to Market Business News, organizational infrastructure “outlines how activities including task allocation, supervision and coordination are directed towards its individual aims.”
This infrastructure allows employees to better understand their company, its hierarchy and the overall work environment. Because a business’ organizational infrastructure is defined by its hierarchy, there must be some form of structure to the hierarchy, whether that be a chain of command, a centralized structure, or assignments for which decisions fall under which sections of the hierarchy.
In an article by HubSpot titled “9 Types of Organizational Structure Every Company Should Consider,” Erik Devaney focuses on the most common organizational structures, noting that each one centers on the how, who, and where respectively when it comes to decision-making. When discussing the “chain of command” structure, Devaney notes that this structure focuses not only on who is dictating employees to do x, y, or z but also how potential issues and proposals should be communicated.
The “span of control” structure focuses on who falls under the manager’s supervision and which tasks fall under a specific department’s jurisdiction. A “centralized” organizational structure, on the other hand, describes where the decisions are made. It means that, even if the business has a chain-of-command structure, certain subdivisions within the business have a say in the final decisions.
Depending on the head of the company, any one of the organizational structures discussed could be successful. Organizational infrastructure, although a somewhat simple concept, can show a lot about how a business operates. It can reveal how a company communicates with its different divisions and employees, what the work culture is like, and what a company’s leaders value. A business’ infrastructure is imperative, as it gives a sense of order to a company and allows for everyone from employees to managers to have some say in how the business is run.
A business’ structure can also be a way for future generations of business owners, CEOs and managers to see how a company is run in terms of its dynamic with its employees and clients. What went right? What could be altered or removed? These questions and more could change how future generations run their own businesses.
“What is organizational structure? Definition and meaning.” Market Businesses News, 12 Apr 2021, https://marketbusinessnews.com/financial-glossary/organizational-structure-definition-meaning/.
Devaney, Erik. “9 Types of Organizational Structure Every Company Should Consider.” HubSpot, https://blog.hubspot.com/marketing/team-structure-diagrams. Accessed 12 Apr 2021.