What does organizational structure define?

Organizational structure refers to the framework that outlines how activities such as task allocation, coordination, and supervision are directed toward achieving organizational goals. It defines the degree of rules, regulations, and decision-making authority within an organization. This structure is fundamental because it determines how roles and responsibilities are assigned, how information flows between levels of management, and the overall hierarchy within the organization.

A well-defined organizational structure enhances clarity in communication and ensures that every employee understands their role and the extent of their authority in the decision-making process. It can influence efficiency, employee morale, and how effectively an organization can respond to market changes.

Other aspects like employee satisfaction, profit margins, and the physical layout of the workplace are influenced by the organizational structure but do not directly define it. While morale may improve in a well-structured organization, and profits can be impacted by how effectively an organization operates within its structure, these elements are not what organizational structure itself defines.