Basic concepts of Organizational Structure and Enterprise Structure

Organizational Structure is basically a hierarchy of Organization and contains various elements including Organizational Units, Positions, Jobs, Persons etc. All of these elements have some attributes which are explicitly maintained and these elements are inter-connected. The structure serves various purposes including the reporting between positions.

On the other hand the Enterprise Structure is defined for Accounting and HR Administration Purposes. An organization may have tens of Organizational Units on the same level but not all of them necessarily be Accounting Entities. Also sometime one level of Organizational Units may have different types of HR Controls and therefore may require definition of additional views. Enterprise structure which contains the Client, Company Code, Personnel Area and Personnel Sub-Areas, therefore identifies the Organization from Accounting and HR Admin Perspective.

Scenario:

Earlier I was running a small-scale business and now when I relate the business with these structures I clearly can see the difference between these two structures. I’ve illustrated it below with a scenario:

A group of business XYZ which specializes in Products A, B and C; each product line has its own accounting and HR controls; however these products share the Organizational Units, Positions and Persons. The business has its corporate office in one of the major cities while the factory in suburbs and a showroom in residential area. I transform the scenario in HR Structures and determine the following:

Business: XYZ

Business Lines: A, B and C

Responsible Organization: 1

Positions: Owner, Product Lead, Salesperson, Office Admin, Office Staff

Location: Offices Complex, Suburb and Residential Area

Business Organization Mapping with HR Structures

Since the Organizational Structure requires to create an Organizational Hierarchy, we would create various org. units as well as positions. It’s possible that some positions regardless of their location may be on same level such as an Office Admin sitting in Showroom or Factory. However, on the other hand from HR perspective he might be following different timings; Factory person might be working from 9 – 5 while the one is showroom working in evenings. This way we could clearly differentiate between 2 different types of structures.