Poor Organizational Structure – Common Signals and Impacts

Poor Organizational Structure – Common Signals and Impacts

Organizational charts are the presentation of reporting relationships and employee roles in an enterprise. A well-structured organizational structure would help you to improve productivity, but a poor organizational structure can weak your business competitiveness. Next, let’s find out the common signals and key impacts of poor ones.

Any Common Signals of Poor Organizational Structures?

Poor organizational structures could have many characteristics, but the following are the most common types:

poor organizational structure example

Irrational Hierarchy Structure

Generally, flat organizational structures are suitable for startups, while large enterprises may need multi-level organizational structure. You should set a specific hierarchical structure according to your team size and strategic objectives. In large enterprises, CEOs should not directly set tasks to interns, since such processes should be done by directors or department managers. In small and medium-sized companies, however, a strict hierarchy may hinder sales opportunities.

Role Confusion

Confusion of roles wastes company resources and reduces profits. For example, multiple employees are responsible for the same project that only one person needs to complete; or a project team receives commands from different superiors etc. These may due to the overlap of management or department managers value the interests of their teams more than the company as a whole.

Workload Imbalance

A poor organizational structure will lead to unequal distribution of workload among different departments, e.g. some departments of a company may often work overtime, while staffs from other departments have nothing to do.

Wrong Reporting Relationships

If your brand, business decision-making or related departments set daily tasks only for your sales or operations departments, then it may cause your team to fail to develop the long-term quality of your brand. These may also be a sign of the loss of long-term competitiveness of enterprises.

What will Happen if You have a Poor Organizational Structure?

The organizational chart of the company is equivalent to the function of a navigation map. However, if you have a poor organizational structure, you may face lots of challenges including the following:

  • Serious financial loss – due to the overuse of enterprise resources and budget
  • Poor communication among different departments – can be difficult for teammates to find who and when to report their tasks.
  • Weak strategic management across departments – hard to plan and follow efficient long-term plans for developing new products or services, building new suppliers channels and so on.
  • Bad brand reputation – delayed orders and long waiting times for your clients. you may also lose new customers.


What Should We Do to Avoid Poor Organizational Structure?

Your company’s strategy needs to be adapted to the company’s organizational structure. Whenever there is a major change in corporate strategy, you should reassess your organizational structure. Although such changes may be more complex and involve many aspects, such as the career development of ordinary employees, team culture, staff functions etc., the new updates will be conducive to the long-term development of enterprises. In addition, the enterprise should provide an efficient process for dealing with orders and customer complaints with strict regulations and criteria.


No matter what kind of organizational chart is adopted, the main purpose is to do your business in a unified and flexible way so as to improve the overall efficiency. Understanding the impact of a poor organizational structure will help you take steps to strengthen your internal management operations.

Besides, you can try some professional yet handy org charting software to efficiently manage your team in different views and human resource management factors: pay and performance, training, recruitment and more.

Edraw OrgCharting user interface

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