The objectives of structure may be summarised as to provide for:
• the economic and efficient performance of the organisation and the level of resource utilisation;
• monitoring the activities of the organisation;
• accountability for areas of work undertaken by groups and individual members of the organisation;
• co-ordination of different parts of the organisation and different areas of work;
• flexibility in order to respond to future demands and developments, and to adapt to changing environmental influences; and
• the social satisfaction of members working in the organisation.
These objectives provide the criteria for structural effectiveness. Structure is not an end in itself but a means of improving organisational performance. Drucker suggests that the organisation structure should satisfy three requirements.
It must be organised for business performance
The more direct and simple the structure the more efficient it is because there is less change needed in the individual activities directed to business performance and results. Structure should not rest on past achievements but be geared to future demands and growth of the organisation.
The structure should contain the least possible number of management levels
The chain of command should be as short as possible. Every additional level makes for difficulties in direction and mutual understanding, distorts objectives, sets up additional stresses, creates inertia and slack, and increases the difficulties of the development of future managers moving up through the chain. The number of levels will tend to grow by themselves without the application of proper principles of organisation.
Organisation structure must make possible the training and testing of future top management In addition to their training, future managers should be tested before they reach the top. They should be given autonomy in positions of actual managerial responsibility while still young enough to benefit from the new experience. They should also have the opportunity of at least observing the operation of the business as a whole, and not be narrowed by too long an experience in the position of a functional specialist.