Organizational Structure

Organizational Structure

• An organizational structure is a form of structure that determines the hierarchy and the reporting structure in the organization. There are different types of organization structures that companies follow depending on their objectives and strategy. To put it simply an organizational structure is a plan that shows the organization of work and the systematic arrangement of work. An organizational structure can be based on geographical regions, products or hierarchy. An organizational chart illustrates the organizational structure.

Hierarchical Structure

• Is a traditional organizational system. Its top-down structure is recognizable when put into a diagrammatic form.

• Employees are ranked at various levels within the organization, each level is one aboce the other.

• At each stage in the chain, one person has a number of workers directly under them, within their span of control

• Chain of command is a typical pyramid shape

Different Types of Organizational Structures

• Traditional• Line• Line and Staff• Functional• Divisional• Product• Market• Geographic• Matrix

Traditional Structure

• Based on functional division and departments• Follow the organization’s rules and procedures to the T

•Having precise authority lines for all levels in the management

Line Structure

• Has a very specific line of command• Approvals and orders in this comes from top to

bottom in a line• Suitable for smaller organization• Allow for easy decision-making• Informal in nature• Have fewer departments, decentralized

Line and Staff Structure

• Combines the line where approvals and information come from top to bottom, with staff department for support and specialization• Are more centralized•Decision making process becomes slower because of the layers and guidelines that are typical to it.

Functional Structure

• Classifies people according to the function they perform• Appear to be successful in large organization• Low cost can be achieved by such companies due to the efficiencies within functional groups

Divisional Structure

• Based upon the different divisions in the organization• There can be many bases to define divisions•Divisions can be defined based on the geographical basis, products/service basis, or any measurement

Product Structure

•Organizing employees and work on the basis of the different types of products.• Advantage : personnel in the group can focus on the particular needs of their product line and become experts in its development, production, and distribution•Disadvantage: duplication of resources

Market Structure

• Basis of specific market the company sells in• A company could have 3 different markets they use and according to this structure, each would be a separate division in the structure

Geographic Structure

• Large organizations have offices at different place, for example there could be north, south, west and east zone. • The organization structure would then follow a zonal structure.

Matrix Structure

• In a matrix structure, the organization places the employees based on the function and the product.

• The matrix structure gives the best of the both worlds of functional and divisional structures.

• Advantage: it facilitates the use of highly specialized staff and equipment

• Disadvantage: arise from the dual reporting structure

Some other kinds of Organizational Structure

•Bureaucratic•Pre-Bureaucratic•Team

Bureaucratic Structure

• It can be seen in tall organization where tasks, processes and procedures are all standardized

• and this type of structure is suitable for huge enterprises that involve complex operations and require smooth administration of the same.

Pre-Bureaucratic Structure

• It is best exemplified in flat organizations where administration and control are centralized

• and there is very little, if any, standardization of tasks.

Team Structure

• It can have both vertical as well as horizontal process flows. The most distinct feature of such an organizational is that different tasks and processes are allotted to specialized teams of personnel in such a way as a harmonious coordination is struck among the various task-teams.