Scale-up is the main goal for any startup, and if you reach this phase, you have passed the phase of confusion, helplessness, and trial-and-error. But it doesn’t mean that all your problems will disappear.
Scaling up a business opens new challenges, which include adding more people to your team, determining the clear roles of each, and implementing a functional organisational structure for effective management.
Most businesses in the growing phase tend to hire more people because they need to delegate tasks due to the increasing responsibilities and jobs growing may require. Even not knowingly, they have created an organisational structure where the owner automatically has the most authority, the longest one employed comes next to the power, and the newest does the job nobody wants.
Without an organised and clear structure, this can lead to a mess. There needs to be a clear definition of roles that improves communication and productivity in a business. If this doesn’t happen, your business may run into problems that could get the whole business into trouble.
Therefore, you need to have an organisational structure that works.
4 Types of Organisational Structure
- Flat
- Divisional or multi-divisional
- Matrix
- Functional
Organisational structure refers to the hierarchy of positions in a company or business.
Flat
With flat, there’s no clear hierarchy of position. It’s commonly most prominent in businesses with few employees or startups, as they employ people when needed. Most organisations start with this structure and grow out of it as they scale up.
Divisional or multi-divisional
Employees are grouped, but the groups work together to reach a goal. A manager or supervisor oversees these groups and the typical organisational structure for large companies.
Matrix
The matrix is a combination of other organisational structures. It has two overseers, one functional manager and the other one a product manager. The employees are grouped, and they report to these two higher-ups.
Functional
Functional structure, bureaucratic organisational structure, is a type of organisational structure where the employees are divided based on their responsibilities. Each group has a manager or supervisor that oversees them. Best choice if you’re scaling up.
Why the Functional Organisational Structure Is the Best Choice if You’re Scaling Up
The hiring process in a functional organisational structure is based on the function of each role. Employees are hired based on their skills and capacity to fulfil the responsibility in each position. It is an ideal choice if you want to scale up. In other organisational structures, not-needed positions are often overlooked but still part of the company’s expenses.
Also, having no clear definition of each role is a typical problem in other organisational structures, making the employees prone to inefficiency, unaccountability, and exploitation.
As a business owner, this can end up with you doing all the work yourself. Your staff needs the proper knowledge and skills for the job and keeps bugging you to know what to do or decide. It will leave you stressed and overworked.
Using a functional organisational structure, you’ll be able to grow your business and reach its true potential. You’ll work coherently and productively because you hire people based on the function and not just the aesthetics of having a hierarchy.
The staff will also know that there’s a clear system. They will know who will be their go-to person for instructions and feedback. You will not be throwing away money because there’s no duplicated work, and resources are not wasted over miscommunication. The employees will be confident in their work because they know their roles are their jam.
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