Organizational structures and forms of organization

By Larry Alton In: While you may find similar organizations within the same industry, there will always be nuances and differences between every brand. The importance of an organizational structure Businesses need structure in order to function and grow.

Organizational structures and forms of organization

Organizations large and small can achieve higher sales and other profit by properly matching their needs with the structure they use to operate. There are three main types of organizational structure: Functional Structure Functional structure is set up so that each portion of the organization is grouped according to its purpose.

In this type of organization, for example, there may be a marketing department, a sales department and a production department. The functional structure works very well for small businesses in which each department can rely on the talent and knowledge of its workers and support itself.

However, one of the drawbacks to a functional structure is that the coordination and communication between departments can be restricted by the organizational boundaries of having the various departments working separately.

Divisional Structure Divisional structure typically is used in larger companies that operate in a wide geographic area or that have separate smaller organizations within the umbrella group to cover different types of products or market areas.

For example, the now-defunct Tecumseh Products Company was organized divisionally--with a small engine division, a compressor division, a parts division and divisions for each geographic area to handle specific needs. The benefit of this structure is that needs can be met more rapidly and more specifically, as each division can operate more or less independently for the other divisions in the company.

However, a divisional arrangement can also be cumbersome, as communication is inhibited because employees in different divisions are not working together.

Divisional structure is costly because of its size and scope.

Introduction

Small businesses can use a divisional structure on a smaller scale, having different offices in different parts of the city, for example, or assigning different sales teams to handle different geographic areas.

Matrix Structure The third main type of organizational structure, called the matrix structure, is a hybrid of divisional and functional structure. Typically used in large multinational companies, the matrix structure allows for the benefits of functional and divisional structures to exist in one organization.

This can create power struggles because most areas of the company will have a dual management--a functional manager and a product or divisional manager working at the same level and covering some of the same managerial territory.

She has written for a variety of online destinations, including Peternity. She holds a Bachelor of Arts in communication from the University of Rochester.The organization's structure, or design, is the overall arrangement of the organization's various roles, processes and their relationships in the organization.

The design of an organization is a means to accomplishing the organization's overall goal -- the structure is not an end in itself. Organizational structures developed from the ancient times of hunters and collectors in tribal organizations through highly royal and clerical power structures to industrial structures and today's post-industrial structures.

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Jul 06,  · This is going to be a five part post that explores various types of organizational structures that either already exist in today's business landscape or are starting to emerge as viable options. Traditional organizational structures come in four general types -- functional, divisional, matrix and flat -- but with the rise of the digital marketplace, decentralized, team-based org structures are disrupting old business models. The organization's structure, or design, is the overall arrangement of the organization's various roles, processes and their relationships in the organization. The design of an organization is a means to accomplishing the organization's overall goal -- the structure is not an end in itself.

Traditional organizational structures come in four general types -- functional, divisional, matrix and flat -- but with the rise of the digital marketplace, decentralized, team-based org structures are disrupting old business models.

Organizational structure is the means by which a business or corporation defines roles, responsibilities and levels of authority within the company.

Organizational structures and forms of organization

The structure shows . Jul 06,  · This is going to be a five part post that explores various types of organizational structures that either already exist in today's business landscape or are starting to emerge as viable options.

Jul 06,  · The five types of organizational structures that I will explore are: The traditional hierarchy (part 1 is already available) Flatter organizations (part 2 is already available). The organization's structure, or design, is the overall arrangement of the organization's various roles, processes and their relationships in the organization. The design of an organization is a means to accomplishing the organization's overall goal -- the structure is not an end in itself. Organizational structures developed from the ancient times of hunters and collectors in tribal organizations through highly royal and clerical power structures to industrial structures and today's post-industrial structures.
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