What is the relationship between an organization's structure and its activities? Let us take a look at various examples of different organizational structures to find out.
Organizational structure is a type of hierarchical coordination of actions that are undertaken to achieve the collective organizational goal. This is achieved by dividing the organizational processes and functions into well-marked departments and by delegating different levels of responsibilities to different people, demarcated by designations.
The structural requirement of an organization depends upon its objectives. Due to this reason, we can find many types of structures and designs for different types of organizations, each of which meets a specific organizational need.
Types of Organizational Structures
There are two basic types of organizational structures:
But based on complex needs and activities, there have evolved a lot of sub-structure that fall under these two broad categories.
Tall organizations are marked by multiple hierarchies and a pyramidal mold having several rungs to it. This kind of structure may be found in both operational and informal organizations.
A flat organization can commonly be seen in start-up and small companies which have fewer hierarchical needs and a smaller budget to be able to afford a complex structure. There is usually one managerial head to which all lateral departments such as accounting, human resources, etc., collectively report.
Structures to Run an Organization
The two basic structures fail to envelop all factors of organizational activities and, hence, many more structural models have evolved from these two basic structures as a result. Let's take a brief look at the different types of structures to get an idea.
These organizations do not involve standardization of tasks and their structural hierarchy is completely centralized. This is, by far, the best example of a flat organization.
These are the typical tall organization structures that enforce standardization of tasks and this structure is best suited for large and complex organizations.
Such organizations are divided into specific departments and employees are hired for each department based on their professional skill sets that are best suited for that department.
For instance, an accounts graduate would be preferred over an arts graduate for handling the accounts and taxation department.
This kind of structure is also known as "product structure" as each functional unit is grouped as a division.
Each of these divisions is equipped with all required resources and functions for the achievement of divisional goals. Divisions can be distinguished on the basis of geographical location, product, services, etc.
Employee groups are made based on product and function. This way, it imbibes the best functional and divisional structures.
If a company is dealing in 3 different products, it can have separate functional departments for all three, such as separate sales, customer services and troubleshooting departments for each product.
A matrix structure can be of three types - weak matrix, balanced matrix and strong matrix. In a weak matrix, a project manager is given limited authority to supervise the cross functional project aspects.
In a balanced matrix, the authorities and responsibilities of a project are equally shared by the project manager and the functional managers.
In a strong matrix, the project manager is the whole-and-sole authority with functional managers extending technical assistance and resources when approached.
This is the newest rung in the organization structure evolutionary ladder! We can see many organizations working in teams, which may be vertical or horizontal. The teams can also be decided based on individual processes and functions.
Managers are typically vested with the responsibility of coordinating and controlling external relations via electronic media.
This is an extension of the network structure and it enables managers to establish and maintain regular contact with different divisions all over the world without necessitating maintenance of extensive physical and manual infrastructure. This kind of organization is boundary less and its operation is completely/majorly dependent upon the Internet.
That was a brief overview of organizational structure examples. However, most organizations we see today do not belong to the pure types discussed. They are usually some sort of customized hybrid combining aspects of several different organizational architectures to meet individual organizational requirements.