An organizational structure defines how job tasks are formally divided, grouped, and coordinated.
The purpose of structure is the division of work among members of the organisation, and the co-ordination of their activities so they are directed towards the goals and objectives of the organisation.
The structure of an organisation affects not only productivity and economic efficiency but also the morale and job satisfaction of the workforce.
The Key elements of organizational structure
- Work Specialization: To what degree are activities subdivided into separate jobs?
- Departmentalization: On what basis will the jobs be grouped together?
- Chain of command: To whom will the individuals and groups report to?
- Span of control: How many individuals/groups can a manager efficiently and effectively direct?
- Centralization and decentralization: Where does the decision making authority lie?
- Formalization: To what degree will there be rules and regulations to direct employees and managers?
Types of organizational structures
- Functional
- Divisional
- Matrix
- Hierarchical
- Team-based
- Flat
- Network
Functional Structure
The organization is divided into different departments such as engineering, finance, marketing, etc. Each department is specialized, and is led by functional heads.
Divisional Structure
Each division in the organization operates autonomously, similar to individual entities within the larger organization. Each division operates as a semi-autonomous unit with its own functional teams.
Matrix Structure
It combines the elements of both functional and divisional structures. Employees have dual reporting relationships. One to their divisional head, and one to their functional head.
Hierarchical Structure
The hierarchical organization depicts a pyramid. It features a traditional chain of command from the top to the bottom, with each employee having a supervisor.
Flat Structure
A horizontal or a flat organizational structure suits companies with minimal levels between upper management and staff-level employees such as start-ups. This structure tends to promote less supervision and greater employee involvement.
Team-based Structure
In this type of organizational structure, the company is organized into teams rather than traditional departments. Teams are responsible for achieving specific goals, and tend to have more autonomy than functional or divisional structures.
Network Structure
With business increasingly reliant on external services and dispersed resources, a network organizational structure emerges to manage this complexity. The core company focuses on strategy and coordination.
(apologies for the shit picture)