When your business keeps on growing, you may want to consider creating groups in your organization. Those groups can be the departments themselves, but you can also think about groups of managers, clusters or to assemble the other positions.
Creating groups can help you with the designing of an organization chart and to keep track of who’s working in the organization. Those are some advantages of creating groups in your business, but I will share some important effects why you should consider to create groups in your business!
1. Common Monitoring on Positions
This is one of the most important effects you will experience when you create groups in your organizations. You can position one manager with great responsibility which monitors the activities of the unit. When you collect all the managers of the units to one super structure, there will form a system of formal authority.
2. Sharing Common Resources
The units you formed will share common resources with each other. The managers of these unit will have a joint budget. Mostly they have to utilize the same facility and equipment too.
Through utilizing the same things, your groups will have to work together with each other. They will have to deliberate about who’s using what facility on what time and all the activities must be clear to every member of the unit.
3. Common Performance Measurements
When you create groups in your business, there will form common performance measurements. By sharing facilities between the members of the units, you can measure the joint costs of their activities.
Especially when the members of the units contribute to the production of the same services, the joint costs of the joint output can be measured. When the common performance measurements are formed, it will stimulate the groups to coordinate their activities on a higher levels.
4. Stimulating Mutual Adjustment
The members of an unit are forced to use the same facilities, as I explained before. By this you can share resources and enable direct supervision. The results of these is the minimum level of physical distance.
A minimum level of physical distance advances informal contact frequently. This will stimulate the coordination by approximation.
So the main subjects you read above were the enabling of direct supervision, the approximation and the regimentation of output. This way you can measure the common performances.