Organizational Structure

DEFINITION of 'Organizational Structure'

Explicit and implicit institutional rules and policies designed to provide a structure where various work roles and responsibilities are delegated, controlled and coordinated. Organizational structure also determines how information flows from level to level within the company. In a centralized structure, decisions flow from the top down. In a decentralized structure, the decisions are made at various different levels.

BREAKING DOWN 'Organizational Structure'

A good organizational structure can often spell the difference between a smooth operating organization and one in chaos. By establishing a hierarchical structure with a clear chain of command, companies are better able to streamline their operations.

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