Business organization: Everything you need to know

When we talk about business organizations, we must bear in mind that organizations must have a previously defined structure, always aligned with the activity of the company and the achievement of the established objectives efficiently and effectively. In addition, organizing the company correctly helps improve communication between different employees, optimize resources and in most cases reduce costs. That is why, before starting up the company or in the event of relevant changes in its activity, we must have a clearly defined structure.

What is business organization?

Now that we know the companies must have a clear definition of their organization, we can say that the business organization consists of efficiently ordering the company's resources. To represent the defined organization, companies support on graphic representations called organizational charts. We must bear in mind that this representation is not only a structure embodied on paper, but also represents the DNA of each department, section or level of the company.

In addition, if what is desired is to modify the organizational structure of the company, we must be able to adapt the available resources to the new needs, that is, we must not create a new organization chart from scratch, but we must design the ideal structure based on of the available equipment. It is also very important that the intervention be "integral". Many companies believe that simply changing the organization chart will solve problems and improve efficiency when this is not the case. The creation or modification of the organizational chart must be linked to the definition of functions, roles and responsibilities of each person, the degree of interaction between the different players, the communication methods of each of the critical points of communication between the teams or the indicators. that are going to be used.

Although each company has certain characteristics, there are similar attributes when it comes to establishing business organizations optimally:

• Structure: determines the administrative mechanics of the company, therefore, we can define the structure as the base exceeds those that are sustained by the other elements of the organization.
• Functions: determine the activities to be carried out, how they are going to be organized and the interrelationship between them to make the most of  the resources.
• Levels: it is important to clearly define the levels of responsibility of each of the parties involved in the organization. One of the best ways to define levels of responsibility in through the RACI matrix, as it allows us to clearly identify and assign roles and responsibilities within the organization.
• Objectives: objectives are a fundamental element when establishing business organizations. It must be understood that companies must be motivated by one or more objectives that, in turn, respond to the previously defined strategic approach.

Another key aspect when the business organization relapse in the role played by the management of the company. We must bear in mind that directing implies having the ability to make decisions to achieve the determined ens. The management of the company must be able to plan, organize, manage, and control all activities that take place within the company.  In addition, delving into the current context, companies no longer look for traditional bosses who act as a voice of command, but demand leaders who value the work of employees, con guide the teams to achieve the established objectives (optimizing the maximum potential of workers) and are able to retain talent in the company. Therefore, we must keep in mind the concept of leadership when defining the business organization. 

Classification of business organizations

When classifying business organizations, there are different formulas or classifications depending on different observations parameters. Next, let's see the most important ones:

A. According to the economic sector

• • Primary sector: organizations that obtain natural resources and subsequently transform them into unprocessed raw materials. 
  • Secondary sector: organizations that allocate their activities to the transformation of raw materials through industrial or artisanal processes.
  • Tertiary sector: organizations that supply the market with goods or services.
  • Quaternary sector: although the quaternary sector in not as well-know as the 3 mentioned above, this sector includes economic activities based on intellectual work or the knowledge economy. That is, value is obtained from scientific ideas. Fundamentally, this sector is born from I+D+I, research, development, and innovation.

B. According to the size of organization

• • Microenterprise: organizations with fewer than 10 employees.
  • Small business: organizations that have between 11 and 49 employees.
  • Medium-sized companies: organizations that have between 50 and 250 employees.
  • Large company: organizations with more than 251 employees.

C. According to the origin of the capital

• • Public company: the capital of these organizations come from public investment provided by local, regional, or national entities.
  • Private company: the capital of these organizations comes from the investment made by individuals or private companies.
  • Mixed company: of the total capital contributed, on part corresponds to the investment made by the public administration and the other corresponds to the investment made by individuals or private companies.

Importance behind the business organization

Having clear all the aspects defined above, we can see how the correct management of the business organization brings multiple benefits to organizations. Below are the most relevant ones:

• Communication between the different departments or areas of the company is favored. This factor makes it possible to share and work together to achieve the company's main objectives.
• There is an important in results due to the reduction of costs, the optimization of resources and the improvement of execution times.
• Teamwork is enhanced due to cooperation between the parties involved in the organization.
• Improved personal productivity. Having workers involved and motivated is key when it comes to generating a productive and healthy environment within the company.
• There is a streamlining of processes. All parties involved know the tasks to be performed, so there is an acceleration of the company's production processes.
• The governance of the company is facilitated and the image of the leader in front of the workers is improved.

In addition, many companies have now focused on the evaluation of their workers as one of the most important aspects when organizing companies. That is why it is increasingly common for competency assessments to be carried out within companies. This allows for a more comprehensive view of workers' strengths, as well as the identifications of areas for improvement. Evaluating job skills is an indispensable process for the growth of on organization and for the professional development of those involved.

The business organization has a large part of previous work for a business to go on the right track and, therefore, it must be understood that the business organization must be a priority when structuring any type of business, since it allows establishing everything necessary to achieve the established objectives in the most efficient way possible. Furthermore, I have not tried to define an organization chart, the business organization works only if all the previously mentioned aspects are shared (functions and responsibilities, interactions and meetings between teams, which indicators will be measured and how often, etc.). 

Now is the time for you to start planning and organizing your resources based on the goals you want to achieve. For this, if you wish, you can contact us and we will accompany you throughout the process of change necessary to organize your company more efficiently and effectively.

Shall we talk?