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October 29, 2024
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ME-Alliance Business Insights
Organizational Structures
An organizational structure pinpoints how specific activities will be executed to achieve company targets. An organizational structure may entail roles, responsibilities, and policies. An organizational structure also outlines the flow of information and hierarchy.
There are 7 types of organizational structures.
1. Functional Structure
Also known as a bureaucratic organizational structure, splits up the company based on its workforce’s specialization. Many companies follow this structure, with split departments such as HR, marketing, finance, etc.
2. Divisional or Multidivisional Structure
This structure is popular in big companies, which makes sense since it divides the company based on products, projects, and/or subsidiaries they operate. The divisions could also be divided geographically, and each division would have its own set of leadership.
3. Team-Based Structure
This is one of the simplest structures, includes segregating the company into teams with specific goals and activities. Each team would have a designated manager/leader.
4. Flat (Flatarchy) Structure
Also referred to as a horizontal structure, this is because the hierarchy is flattened, and employees are given a high level of autonomy. This structure enables companies to implement changes faster.
5. Matrix Structure
The matrix structure is the most puzzling and the least utilized among companies. This structure arranges employees across various superiors, divisions, or departments. For instance, an employee at a matrixed company might be assigned responsibilities in both sales and customer service.
6. Circular Structure
Circular structures are hierarchical in nature, characterized by placing higher-level employees and managers at the organization’s center, surrounded by adjacent rings expanding outward, which accommodate lower-level employees and staff. This organizational approach aims to foster open communication and collaboration across various hierarchical levels.
7.Network Structure
The network organizational structure delegates essential tasks to third-party entities. Firms adhering to this model are typically geographically dispersed and maintain modest headquarters. Outsourcing is prevalent for most core functions.
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