Types of organizational structure pdf

The organizational structure examples are usually a subject of study so that there can be a perfect structure for a particular company.

types of organizational structure pdf

It helps an organization decide how the authority passes on, how message communication happens. There are several types of corporate structures organizational structuresand organizations choose the one most suitable for them.

Organizational structure is extremely important during a business. It helps managers manage the human resources issues. Allows managers to tackle as to how employee treatment occurs in the organization. It also helps employees understand what are their positions, who are they reporting to and who reports to them. It helps create a hierarchy within the business. Without a corporate structure, it would be extremely difficult to access who is responsible for what.

A well-maintained organizational structure can provide a roadmap for the advancement of employees within the organization which helps motivate employees to achieve their goals. A matrix structure is the one in which employees are answerable to more than one managers. A matrix structure derives its qualities from different structures. The matrix structure followed by Starbucks coffee is one of the best organizational structure examples.

In the global market, Starbucks has three major divisions: 1. America, 2. Europe, Middle East, Russia and Africa and 3. China and Asia-Pacific. Each division has a vice president. This way, each manager answers to two superior managers, the geographic head, and the functional head. Starbucks produces several products now including coffee, canned products, merchandise, bakery products and soon. Starbucks has teams at the lower level. For example, in their cafes, they have teams to make products and deliver them.

Other firms that use matrix structure are Walmart, Apple and Dell. The figure on the left demonstrates the matrix organizational structure of Starbucks.

It can be seen here how the authority flows in two ways. First, the authority is flowing vertically downwards through business analyst manager, development manager and quality assurance manager.

Second, the authority is flowing horizontally sideways through product 1, product 2 and product 3 managers. There are several advantages of a matrix structure. Firstly, it uses the resources of the organization efficiently and to the full, because one person is doing multiple jobs. Moreover, new employee hiring is not done, instead existing employees are given extra jobs. Thirdly, employees motivation is high because they are being rewarded through new jobs and better pay; they will work better and more efficiently.

Regional divisional structure followed by PepsiCo is another one of the best organizational structure examples.All managers must bear that there are two organisations they must deal with-one formal and the other informal.

The formal organisation in usually delineated by an organisational chart and job descriptions.

types of organizational structure pdf

The official reporting relationships are clearly known to every manager. Alongside the formal organisation exists are informal organisation which is a set of evolving relationships and patterns of human interaction within an organisation that are not officially prescribed. These organisational structures are briefly described in the following paragraphs:.

A line organisation has only direct, vertical relationships between different levels in the firm. There are only line departments-departments directly involved in accomplishing the primary goal of the organisation. For example, in a typical firm, line departments include production and marketing.

In a line organisation authority follows the chain of command. The levels of responsibility and authority are likely to be precise and understandable. The line officers or managers have the direct authority known as line authority to be exercised by them to achieve the organisational goals. The staff officers or managers have staff authority i. This is also known as functional authority. An organisation where staff departments have authority over line personnel in narrow areas of specialization is known as functional authority organisation.

Exhibit In the line organisation, the line managers cannot be experts in all the functions they are required to perform. But in the functional authority organisation, staff personnel who are specialists in some fields are given functional authority The right of staff specialists to issue orders in their own names in designated areas. The principle of unity of command is violated when functional authority exists i.

Organizational Structure Examples, Types and Advantages

Some staff specialists may exert direct authority over the line personnel, rather than exert advice authority for example, quality control inspector may direct the worker as well as advise in matters related to quality. While this type of organisational structure overcomes the disadvantages of a pure line organisaional structure, it has some major disadvantages:.

They are: i the potential conflicts resulting from violation of principle of unity of command and ii the tendency to keep authority centralized at higher levels in the organisation. Most large organisations belong to this type of organisational structure. These organisations have direct, vertical relationships between different levels and also specialists responsible for advising and assisting line managers. Such organisations have both line and staff departments.

Staff departments provide line people with advice and assistance in specialized areas for example, quality control advising production department. The line functions are production and marketing whereas the staff functions include personnel, quality control, research and development, finance, accounting etc. The staff authority of functional authority organisational structure is replaced by staff responsibility so that the principle of unity of command is not violated. Some staffs perform only one of these functions but some may perform two or all the three functions.

The primary advantage is the use of expertise of staff specialists by the line personnel. The span of control of line managers can be increased because they are relieved of many functions which the staff people perform to assist the line.

8 Types of Organisational Structures: their Advantages and Disadvantages

In this type of structure, the organisation can have different basis on which departments are formed. They are:.

The line, line and staff and functional authority organisational structures facilitate establishment and distribution of authority for vertical coordination and control rather than horizontal relationships. In some projects complex activity consisting of a number of interdependent and independent activities work process may flow horizontally, diagonally, upwards and downwards.

The direction of work flow depends on the distribution of talents and abilities in the organisation and the need to apply them to the problem that exists. The cope up with such situations, project organisations and matrix organisations have emerged. A project organisation is a temporary organisation designed to achieve specific results by using teams of specialists from different functional areas in the organisation.Structure of an organisation which results from the organising process is the basic framework within which the decision-making behaviour of an executive takes place.

It is an established pattern of relationships among the components of the organisation. Line Organization 2. Functional Organization 3. Line and Staff Organization 4.

Types of Organizational Structures

Committee Organization 5. Project Organization 6. Matrix Organization 7. Divisional Structure 8. Organic Structure 9. Simple Structure Network Structure. The following are the various types of organization structure:.

The following analysis gives the nature, merits and demerits of these structures:. It is also known as Scalar organization or Military form of organization. It is the oldest form of organization. Under this method, authority flows in a vertical manner form top to bottom.

Each position in the structure has an authority over a lower position. Line organization is of two types, viz. Under pure line organization all perform same type of work at any level.When organizations are new and quite small, there is less of structure but when they grow a little larger, this structure is often based on practical groups.

Therefore, activities related to production are grouped together, as are personnel activities and marketing activities. Positions can be grouped together based on quite different logics that often serve quite different purposes. Tasks can be grouped according to shared expertise or function, process, product, time horizon, or geographical location.

Organizational structure allows the enunciated facility of tasks for a lot of procedures and purposes too numerous objects like workgroup, sections, subdivisions, branch, and individual. Organizational structure entirely relies on two things such as the company and the project.

The structure assists to describe the tasks and responsibilities of the associates who are in the work group, sections, company. It is usually a method of responsibilities and recording policies in to provide associates of the group a way when implementing projects. A virtuous operational structure will let individuals and groups work efficiently together while making hard work morals and approaches.

Administrative structures include a specific level of regularization.

4 Types of Organizational Structures

They are preferably suitable for greater scale or larger multifaceted organizations, most compelling on an extraordinary structure. The stress between non- administrative and administrative structures is resounded difference between gradual and automatic structures. Functional Structure organizational is a structure which includes undertakings like supervision, direction, management, and allocation of responsibilities. The organizational structure selects how the processes and presentations of the organization can carry.

The communication organization structure narrates to how the associate in a company are gathered and to whom can they report. One unoriginal means of establishing individual is done function.

Few collective activities in a company contain marketing, HR, manufacture, and bookkeeping. The benefits and importance of functional structure include quick decision making as the members of the group are able to interconnect effortlessly with each other. The divisional structure, which is also called as product structure is an arrangement of a business that breakdowns the organization into separation which is self-concerned with.

A division is self-oriented and includes groups of functionalities that execute to make a product. It plans to operate and enter like a distinct revenue or business center. The roles and duties incline to be considerably more complex defined in the matrix structure. The matrix structure bonds employees by both function as well as the product.

A matrix company over and over again exploits and develops groups of staffs to accomplish the task, so as to take advantage of the power and in order to hide the weaknesses, of reorganized and practical forms. Hierarchy Structure. What are the 4 Types of Organizational Structures?Organizational charts are a good way to visualize reporting relationships and team roles in businesses, nonprofit organizations, educational institutions and governments.

The type of organization chart you need will reflect on the type of organization you have and what information you want to focus on conveying. A functional, top-down organizational chart reflects a traditional business structure. This structure shows the C-Suite at the top, followed by other senior management, middle managers, and so on. The structure is divided into traditional departments like IT, marketing, finance, human resources, and operations based on everyone's functional role in the organization.

In such an organizational structure, employees with similar skillsets and specialization are grouped together. However, they often suffer from lack of visibility and communication with other departments. A divisional organizational chart reflects a company organized along a product line or specific geography. For example, in a car company the divisions may represent SUVs, sedans, and electric cars.

Each division than has it own functional structure like IT and marketing. A company will use a divisional set up like this when one division is sufficiently independent from another, however this kind of structure can also add some accounting and other overhead.

A matrix organizational chart reflects a company where employees are divided into teams by projects or product lead by a project or product manager, but also report to a functional manager. It shows a company that operates using cross-functional groups instead of vertical silos. A matrix organizational structure can help facilitate better, more open communication and create a flexible, dynamic work environment that can easily shift resources where they're needed, but it can also create confusion and frustration with dueling priorities and supervisors.

A flat organization structure will show few or no levels of management between executives and all other employees. This type of structure empowers self-management and greater decision making ability for every employee. It's most often employed by smaller businesses, but it's not unheard of it even at larger companies.

The org chart shows the individual roles and chain of command within the business structure. A well-managed company will function according to this framework, as well. The chart above shows the organizational structure of a video game company.

This hypothetical company has four positions that report to the CEO. An org chart is useful as a valuable management tool. It allows managers to effectively manage goals, develop strategy, and improve interaction between individuals or entire departments.

If the org chart structure does not mirror the way the enterprise functions, it points to potential problems in operating the company.

types of organizational structure pdf

An organization chart can also be used to show other hierarchies, such as corporate entity structure. The chart below shows the corporate structure of a commercial real estate company.You can never understand the types of organizational structure until you do not have the basic idea of organizational structure.

Organizational structure is the arrangement in which the organization works at different levels. Work at different level to achieve its organizational goals and objectives. We may also define organizational structure as the allocation of tasks, coordination and supervision towards the achievements of certain organizational goals. There are different types of organizational structure, which works in different organization to achieve its certain goals and objectives. You need to be aware of them all of these types.

types of organizational structure pdf

Instead of product lines, the organizational structure is arranged according to functional areas. The specialized ones in certain skills are group in separate units in functional structure. It is best for the organization which is making specific, uniform products. The organization that contains single dominant core product is best suited for the functional structure, because every sub unit of the structure become specializes in performing its particular course of action.

This kind of organizational structure lack flexibility but are economically efficient. Different functional areas face difficulty in communication with each other. If a university decides to make functional structure as its organizational structure then it groups its activities in the following functions. There are certain other potential benefits that are associated with the functional structure of the organization like. Besides advantages, there are certain disadvantages of functional structure too which are as follow.

When an organization is divided into various self contained business units, it exhibits divisional structure in which each sub unit of the organization works as profit centre. Divisional structure is based on the market or product or combination of both. Each divisional unit works with certain basic functions like finance, corporate planning, personnel etc and there may be some functional areas or product lines too. The divisional units are partially managed on centralized basis usually through headquarter of the organization.

American businesses used decentralized type of divisional structure. The expanding organization finds it difficult to manage its various products or services in various markets. There are four ways in which a divisional structure can be organized. The functional activities are performed both centrally as well as divisionally in the divisional structure. There are obvious advantages associated with the divisional organizational structure. The main advantage is that there is clear accountability.

This results in the enhancement of the employee morale which is not possible in the centralized structure. Besides these advantages, there are certain other advantages of divisional structure.

There are many career development opportunities for the managers in divisional structure. The local situations are effectively controlled on divisional basis. The organization contains competitive climate.There are many answers to that question. It identifies each job, its function and where it reports to within the organization. There are many types of organizational structures. Each organizational structure comes with different advantages and disadvantages and may only work for companies or organizations in certain situations or at certain points in their life cycles.

The functional structure is based on an organization being divided up into smaller groups with specific tasks or roles. For example, a company could have a group working in information technology, another in marketing and another in finance. Each department has a manager or director who answers to an executive a level up in the hierarchy who may oversee multiple departments. One such example is a director of marketing who supervises the marketing department and answers to a vice president who is in charge of the marketing, finance and IT divisions.

An advantage of this structure is employees are grouped by skill set and function, allowing them to focus their collective energies on executing their roles as a department. One of the challenges this structure presents is a lack of inter-departmental communication, with most issues and discussions taking place at the managerial level among individual departments. For example, one department working with another on a project may have different expectations or details for its specific job, which could lead to issues down the road.

Larger companies that operate across several horizontal objectives sometimes use a divisional organizational structure. This structure allows for much more autonomy among groups within the organization. One example of this is a company like General Electric. GE has many different divisions including aviation, transportation, currents, digital and renewable energy, among others.

Under this structure, each division essentially operates as its own company, controlling its own resources and how much money it spends on certain projects or aspects of the division. Additionally, within this structure, divisions could also be created geographicallywith a company having divisions in North America, Europe, East Asia, etc.

Instead of having all programs approved at the very top levels, those questions can be answered at the divisional level. A downside to this type of organizational structure is that by focusing on divisions, employees working in the same function in different divisions may be unable to communicate well between divisions. This structure also raises issues with accounting practices and may have tax implications.

A hybrid organizational structure, the matrix structure is a blend of the functional organizational structure and the projectized organizational structure.


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