The organization of a company (business organization) is an administrative function that involves the organization, structuring and integration of the organic units and resources (material, financial, human and technological) of an enterprise, as well as the establishment of its attributions and the Relations between them.

 

The organization is the second administrative function after planning and before management and control. This allows a better allocation and a more efficient use of the resources of the company necessary to carry out the necessary activities and tasks in turn to develop and apply the strategies and to reach the established objectives in the planning; But also allows for better coordination between the different organizational units of the company, and better control of staff performance as well as results.

The organization of a company begins by dividing it into divisions, departments or areas that group activities and tasks with a certain homogeneity, as well as establishing the hierarchical relationships that will occur between them.

There are several types of divisions that a company can adopt, the main ones being mentioned below:

Division by functions
In the division by functions divides the company into divisions, departments or areas that group activities and tasks necessary to perform a certain basic function of the company.

The main advantages of this type of division are that it allows to take full advantage of the technical skills of the members of the company as it groups them according to their specialization as well as obtaining economies of scale since it uses the resources of the company Integral form.

This type of division is the most used by companies (especially SMEs) at their highest levels, due to its simplicity and the easy control it allows.

Division by products
In the division by products divides the company into divisions, departments or areas that group activities and tasks necessary to produce or market a particular product or service of the company.

The main advantages of this type of division are that it facilitates the coordination among the members of the company since it allows them to focus first of all on the product, and allows flexibility to the units of production since these can vary in size without Interfere with the overall structure of the company.

This type of division is usually used by large companies that have a wide variety of products or with few types of products but well differentiated from each other.

Division by geographical location
In the division by geographical location, the company is divided into divisions, departments or areas that group activities and tasks necessary to operate in a given geographical area.

The main advantages of this type of division are that it improves the efficiency of the activities and tasks necessary to attend a given market, to better know and adapt to the conditions and needs of this, and establish clear responsibilities as each division operates as if it were An independent company.

This type of division is often used by large companies that serve wide geographically dispersed markets.

Division by customers
In the division by clients divides the company into divisions, departments or areas that group activities and tasks necessary to serve a particular type of client.

The main advantages of this type of division are that it allows members of the company to better know the needs, preferences and other characteristics of customers, and focus first on achieving satisfaction.

This type of division is often used by companies that serve different types of customers with well-differentiated needs and characteristics.

Division by process
In the division by process divides the company into divisions, departments or areas that group activities and tasks necessary to carry out the stage of a given process.

The main advantage of this type of division is that it allows a greater efficiency in the realization of the process that involves since it allows concentrating and giving a more efficient use to the resources necessary to carry out each one of its stages.

This type of division is usually used by manufacturing or industrial companies at the lowest levels of their production or operations.

Division by projects
In the division by projects divides the company into divisions, departments or areas that group activities and tasks necessary to carry out a specific project of the company.

The main advantage of this type of division is that it allows a greater efficiency in the realization of the projects involved since it allows to concentrate and give a more efficient use to the resources necessary to realize each one of these.

This type of division is often used by large companies that develop complex projects that require large amounts of resources and time to execute.

In practice it is difficult to find a company that has only one type of division. It is common for companies to have a main division at their highest level according to their predominant activities and tasks (for example, a company that produces several types of products well differentiated between them is common to be divided by products, and a A company that operates in broad and geographically dispersed markets is often divided by geographical location), but with other divisions at its other levels. For example, a company at its highest level could have a division by functions, but within the production department have a division by products, and within the department of a certain product have a division by process.

Once the company has been divided and identified the divisions, departments or areas that will have, the next step in the organization of a company is to specify the jobs that will have each of these units, the functions and tasks that will perform Each one, their obligations and responsibilities, and the relationships they will have with the other positions of the company. For example, a function manual specifies the positions or positions that the marketing area will have as well as the functions that each of these will have.

And once the corresponding jobs and functions have been specified, the next step is to define the different processes or work procedures that the company will have. For example, a flowchart or a process manual specifies the process that the production area will have to produce a particular product, or the process that will have the completion of a particular activity or task.

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