In this respect, managers in a business would consider a number of key factors when designing the organizations structures, such as ‘Business size’, this would be an important key factor in this aspect. This is because it is inevitable for a successful business to grow in near future. When this change takes place the numbers of employees also grow to collaborate with the workload. Hence, in this situation the manager will devise a structure that gives authority to those in lower in the organizational structure so every employee has the freedom to communicate with others at all levels.
Also, the type of product supplied by the business would have an impact on the organizational structure. This is because a multinational company such as HSBC would be supplying a range of diverse products, for instance, online banking, loans, international banking, mortgages etc. Therefore to organize itself into the most effective and simplest way the company would use the traditional method of division to sell its products. This will allow the customers to receive in-depth information about the product and how it could be useful for them.
Most importantly, business’s objectives are the predominant feature of a business. Objectives are created and achieved to grow the business meanwhile minimize costs and hence selling prices. This effective route may encourage the use of organizational structures as they it pass some authority to relatively junior employees to minimize management costs. As a result the junior employees could be motivated by receiving some amount of power and would improve productivity.
In this respect, designing an organizational structure would simply mean dealing with several key issues to follow the structure in the most appropriate manner as described above.