What is business organization and how to apply it to my company?

business organization

The business organization is an essential factor that ensures the proper functioning of the organization since it helps to achieve the objectives set in the company, improves the use of the available means and communication between the different employees, increases efficiency and productivity, and lowers costs.  

Therefore, understanding this concept and knowing how to design the business organization is essential to order, structure, and integrate the organic units and available resources of a company and its responsibilities and the relationships between them. If you want to know more about this process and how to apply it, keep reading!

What is a business organization?

Since the organization of companies is very complex and must respond to many different tasks, to achieve the proposed goals, it is necessary to establish a structure to systematize the work and resources of the organization. This is achieved through groups of tasks that respond to a hierarchy that facilitates coordination between departments and makes it as efficient and straightforward as possible.

Thus, in general terms, we can define the business organization as the order of resources and functions necessary to achieve a company’s objectives.

How is the business organization applied?

Once the concept of business organization has been clarified, the next point is to understand how it can be implemented in a real company.

  1. The first step to do this is to be very clear about the objectives of the company, as well as its mission and vision. Then, by setting realistic goals and parameters to meet them, it will be easier to understand what kind of professionals and resources we will need to achieve them.
  2. Second, we will have to assess the resources available to the company and see if it is possible to achieve the proposed goals with these resources. If not possible, it is necessary to adjust or change any of the components of the proposed goals.
  3. It will be possible to divide the organization into different sections to optimize its tasks and functions. The essential requirement to do so is that the tasks in these sections are similar. For example, the division can be:
    • By functions: this is the most used division, especially by SMEs, due to how simple it is to implement them and how easy it is to control. It is based on the company’s division according to its departments, and its main advantage is greater use of the technical skills of the workers.
    • By products: the business organization’s by products is typical in those organizations that offer very varied and different products or services. Therefore, the simplest thing is to organize yourself based on each of the lines of products and services provided.
    • By clients: companies that serve different types of clients (wholesalers, retailers, institutional, etc.) usually opt for this type of organization, which consists of a division according to the characteristics of each segment.
    • By projects: this type of business organization is based on grouping the company’s activity according to the characteristics of a project and the tools necessary to carry it out. In this type of scheme, each project director has the highest authority in everything related to its execution.
  1. Once the company has made the division between the various sections, the last step is to establish hierarchical relationships between them to facilitate coordination. The ideal is, in addition, to organize an organizational chart in which the general structure of the company appears so that all workers know it.
  2. Finally, it will be necessary to organize the tasks. To do this, you have to create a list of the activities you have to carry out and determine the priority jobs. Only then can the employees of each section start working.

However, the work does not end once implemented gives the business organization. The market is constantly changing, as is the technology or the internal conditions of a company, so you must be prepared for any adaptation. On the other hand, it is essential that you control expenses; It will seem very obvious, but it is necessary not to spend more than what is entered, so you must follow a rigorous control of the accounts with costs and profits.

Ultimately, the business organization does not come out of anywhere; it is hard work before getting a business on track without leaving anything to chance.

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