Companies usually create organizational structures that define how activities, task delegations, coordination and supervision are monitored to achieve the organizational aims. Organizational structure also determines the roles and responsibilities are being distributed among the employees. The flow of information is also observed through organizational structure.
Organizational structures represent the hierarchy within the company. They show the arrangement of authority, communications, rights and duties of the parties involved. The structure solely depends on the objectives and strategies to be employed by the company. It follows a particular pattern where there are departments and teams.
Organizational Structures Types
A company may organize its structure into groups which are divided according to each product and geographical area as well. There are types of organizational structures to be observed in different companies.
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Bureaucratic Structure
Bureaucratic Structures represent strict hierarchies in the management team. Bureaucratic structure is sub divided into three:
- Pre- bureaucratic structures can be observed in small scale businesses and usually lacks standards. There is only one person who decides for the whole organization and the communication usually comes in one to one conversations.
- Bureaucratic structures usually have solid standards though relatively small compared to larger industries. The functional structure works very well for small businesses in which each department can rely on its employees.
- Post bureaucratic structures have tight hierarchies and standards but very much open to innovative ideas and trends. It has well-planned methodologies that resulted from systematic techniques and strategies.
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Functional Structure
In functional structure, the whole organization is grouped according to its purpose. Each department is allowed to create and navigate its own resources to come up with decisions for the attainment of company objectives. It promotes great efficiency in each department and makes the management easier to conduct. Functional structure is strongly recommended for large corporations that produce high quantity of products but at low costs. However, one of the drawbacks of this structure is lack of coordination and communication between departments because of boundaries built by working separately.
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Divisional Structure
This type of structure is applicable to larger companies that operate in a wide geographic area or have sub- organizations. It covers different types of markets and products thus a need to create divisions to take care of it is highly needed. One of the benefits of this structure is it handles specific needs to be addressed at a specific time. These needs can be met rapidly and more specifically. On the other hand, this type of structure costs a lot and may be expensive due to its size and scope. Further, the communication is quite limited because of the proximity issues.
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Matrix Structure
The Matrix structure is the hybrid of functional and divisional structures. This type of structure is used in multinational companies and it allows experiencing the benefits of both functional and divisional structure at the same time. The company creates teams responsible for completing assigned tasks. However, this type of structure can create power struggles because most areas of the company will have dual management.
Conclusion
Every company should have organizational structure that fits its goals and vision. It should cover the management of resources and manpower. The type of organizational structures may help or hinder the company’s progress towards accomplishing its goals. Therefore, a thorough understanding of what organizational structure to use is a must.
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