Why might the concepts of organisational structure and performance be related?

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

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Organizational structure is related to performance because the structure of a firm has a great deal to do with how well it can function.

The people who run a firm must make decisions about who will do what jobs.  They must also decide what jobs will be lumped together into departments.  They must decide how much input people below the top level of the firm will have when it comes to important decisions.  All of these things are aspects of organizational structure. 

If these decisions are made poorly, there can be consequences for the firm.  The firm might not work efficiently as, for example, the wrong people are put together into departments.  This sort of mistake can reduce the quality of the firm’s performance.

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