Organizational Structure Types

10 Key excerpts on "Organizational Structure Types"

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  Designing Local e-Government

  The Pillars of Organizational Structure

  • Israel Patiño Galvan(Author)
  • 2019(Publication Date)
  • Emerald Publishing Limited

    (Publisher)

  Usually, an owner assumes most of the managerial responsibility, perhaps with a partner or an assistant. However, there is a narrow division of managerial Table 2. Main Organizational Structures. Forms Structures Simple Simple Functional Classic complexes Divisional Matrix Source : Author (2017), taken from The Organization of Companies (Campos, 2007). 40 Designing Local e-Government responsibility, and probably an unclear definition of who is responsible in situations in which there is more than one per-son involved (see Illustration 5 ). Normally, this type of structure appears when the company is small and its degree of complexity is low, so that decision making is centralized, the areas that exist share responsibili-ties with others, given the staff available and the activities car-ried out. However, as these grow, the organization recognizes a need to initiate the definition of roles. 1.8.2 Functional Structure This is an organizational design that groups occupational specialties and is based on the primary activities that must be carried out, such as production, finance, and accounting, marketing, and personnel. It is a functional approach during which departmentalization is applied to the entire organiza-tion (see Illustration 6 ). It is used in organizations of an indus-trial type that have put their emphases on the principles or parameters of the horizontal design and are pursuing admin-istrative rationality and the increase of economic productivity. Illustration 5. Simple Organizational Structure. Source : Author (2017), taken from The Evolution of the Design and the Organizational Structure (Valenzuela, 2013, p. 74). 41 The Background of Organizational Structures In this type of structure, the company has already defined the main roles of the organization, as well as the definition of responsibilities and functions, to avoid duplication of work, and to direct its efforts to responding to the activities that are increasing.

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  Business Policy and Strategy

  The Art of Competition

  • Chris Chatfield, Cheryl Van Deusen, Steven Williamson, Harold C. Babson(Authors)
  • 2007(Publication Date)
  • Auerbach Publications

    (Publisher)

  88 Business Policy and Strategy: The Art of Competition, 7th Edition division of labor) and integration (coordination), two very important aspects of organizational structure, it is somewhat limiting in its scope. A more complete definition of structure is given by Daft, who reduces organization structure down to its most basic elements and then explains each one individually as follows: 1. It designates formal reporting relationships, hierarchy levels, and span of control. 2. It identifies the grouping together of individuals into departments. 3. It includes the design of systems to ensure effective communication, coordination, and integration of efforts across departments. The three components identified and defined by Daft illustrate both the vertical and horizontal factors of the organization structure. The first two elements of this description deal with vertical communication and structural framework, whereas the third component focuses on horizontal communication and integration across departments. Therefore, an organi-zation structure is vital in determining how labor activities are controlled and coordinated, as well as how people are grouped and allocated through-out the corporation. An important distinction that should be made at this point is the difference between organization structure and organization design. Whereas organization structure focuses on the differentiation of labor throughout the organization and its subsequent integration, organization design centers on the decisions and actions by managers that result in a structure. In other words, the managerial decision-making process necessary to formulate and develop a structure is called organizational design . Upon completing the organization design, an organizational chart depicting the formal organization structure is derived.

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  International Business

  • Shad Morris, James Oldroyd(Authors)
  • 2020(Publication Date)
  • Wiley

    (Publisher)

  Types of Organizational Structures 283 becomes difficult to set priorities and to manage all the expectations. To combat any confusion this situation could cause, companies often designate one boss as the “primary” boss and the other two as “secondary” bosses. Formal organizational structures play an important part in determining how global head- quarters of multinational companies control global subsidiaries. In addition to these formal organizational structures, informal organizational structures, including networks and virtual organizations, can make a critical difference in the success or failure of global ventures. Network Structure Some global industries are organized into fluid structures that bring people together into a group to work on a project; the group dissolves after the project is over, then re-forms, with the same or different members, when a new project becomes available. 16 For instance, the film industry brings together studios, writers, producers, actors, and technical crew for a given project. At the conclusion of the project, this group typically dissolves, and its members join other units to work on new films. Similarly, consulting companies may bring experts together to work on a project, then dissolve the team at the end of that project and form a new team for the next project. The membership of the team may be chosen based on client needs, worker exper- tise, availability, and other considerations. Companies like these, where people constantly move and the structure shifts, are organized through a network structure. The advantage of a network organization is its ability to fluidly respond to rapid and fre- quent change. Because no rigid hierarchies or formal reporting lines exist, collaboration occurs in an informal and fluid manner. This adaptive nature makes the network organization ideal for rapidly changing environments.

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  Management

  • John R. Schermerhorn, Jr., Daniel G. Bachrach(Authors)
  • 2014(Publication Date)
  • Wiley

    (Publisher)

  The traditional alternatives are the functional, divisional, and matrix structures. 11 LEARN MORE ABOUT 245 Traditional Organization Structures Functional Structures In functional structures, people with similar skills and who perform similar tasks are grouped together into formal work units. Members of functional departments share techni- cal expertise, interests, and responsibilities. The first example in Figure 11.2 shows a func- tional structure you might find in medium-sized business, with top management arranged by the functions of marketing, finance, information systems, and human resources. Under this structure, sales tasks are the responsibility of the Chief Sales Officer, information sys- tems tasks are the responsibility of the Chief Information Officer, and so on. Figure 11.2 also shows how functional structures are used in other types of organizations such as banks and hospitals. Advantages of Functional Structures The key point of the functional structure is to put together people with the same expertise and help them work well together. If each function does its work properly, the expectation is that the organization as a whole will be successful. These structures work well for organiza- tions with only a few products or services. They also tend to work best in relatively stable environments where problems are predictable and the demands for change and innovation are limited. The major advantages of functional structures include the following: • Economies of scale with efficient use of resources. • Task assignments consistent with expertise and training. • High-quality technical problem solving. • In-depth training and skill development within functions. • Clear career paths within functions. A functional structure groups together people with similar skills who perform similar tasks.

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  Management

  • John R. Schermerhorn, Jr., Daniel G. Bachrach, Barry Wright(Authors)
  • 2020(Publication Date)
  • Wiley

    (Publisher)

  Be Sure You Can • explain the differences between functional, divi- sional, and matrix structures • list advantages and disadvantages of a functional structure, divisional structure, and matrix structure • draw charts to show how each type of traditional structure could be used in organizations familiar to you FIGURE 11.6 Matrix structure in a small, multi-project business firm. Project A Manager Manager of Projects Manufacturing Manager Engineering Manager Sales Manager Project B Manager Project C Manager Persons assigned to both projects and functional departments General Manager 208 CHAPTER 11 Organization Structures 11.3 Team and Network Organization Structures LEARNING OBJECTIVE 11.3 Identify the strengths and weaknesses of team, network, and boundaryless structures. Learn More About Team structures • Network structures • Boundaryless structures You will see elements of functional, divisional, and matrix struc- tures in most large organizations, particularly at top levels. They help keep things “organized” and bring a sense of stability to operations. But complexities in today’s environments demand flexibility as well. 20 New technologies . . . climate change . . . transforming societies . . . evolving social values . . . information transparency; all these things and more pressure organizations to constantly change everything from strategies to products to workforce composition to systems and practices. So-called agile organizations are structured to be fast moving, open to change, and internally connected top to bottom and side to side. The foundations for agility are teams and networks, with technology helping to make connections easy and fast across time and space. Team Structures Organizations with team structures make extensive use of both permanent and temporary teams to solve problems, complete special projects, and accomplish day-to-day tasks.

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  Wiley Pathways Healthcare Management

  Tools and Techniques for Managing in a Health Care Environment

  • Donald N. Lombardi, John R. Schermerhorn, Jr., Tere Stouffer(Authors)
  • 2015(Publication Date)
  • Wiley

    (Publisher)

  Health care network Different medical services joining together to provide comprehensive health care, often sharing the services of one business office and laboratory. Horizontal structures New organizational models, which emphasize integration and cross-functional teamwork, of- ten while gaining the advantages of networking through information technology. Informal structure The unofficial but often critical working rela- tionships among organizational members, re- gardless of formal titles and relationships. Integration The level of coordination achieved among an or- ganization’s internal components. Matrix structure Organizational strategy that combines ele- ments of both the functional and divisional structures. Organizational design The process of aligning organizational struc- tures and cultures to best serve the organiza- tion’s mission, strategy, and objectives. KEY TERMS 83 Organization chart Diagram that identifies key positions, job titles, lines of authority, and communication within an organization. Organization structure The system of tasks, workflow, reporting rela- tionships, and communication channels that link the diverse parts of an organization. Organizing The process of arranging people and other re- sources to work together to accomplish a goal. Process reengineering The systematic and complete analysis of work processes and the design of new and better ones with the goal of focusing attention on the future, on patients, and on improving ways of doing things. Process value analysis Managers identify and carefully evaluate each step in a workflow. Each step must be impor- tant, useful, and add value to the overall pur- pose of the organization; if not, the step is eliminated. Quality circle A popular form of employee involvement team in which a group of workers meets regularly to discuss and plan specific ways to improve work quality. Restructuring The process of changing an organization’s struc- ture in an attempt to improve performance.

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  Engineering and Commercial Functions in Business

  • William Bolton(Author)
  • 2014(Publication Date)
  • Newnes

    (Publisher)

  They concluded that different parts of an organization may be operating in different environ-ments. Thus different parts of the organization might be structured in different ways. Thus some parts might have a stable environment and some an innovative environment. Thus some parts of the organization might have a mechanistic structure and some an organic structure. Example What type of organizational structure might be expected for a business which is manufacturing a product for which there is a constant steady demand with little change in technology or market competition? The organization can be classified as operating in a stable environment and thus a mechanistic type of structure is likely. This would indicate a functional organizational structure. Structure of organizations 25 2.6 Activities The general activities of managers and supervisors can be summarized in a number of ways. Traditionally the activities have been seen as planning, organizing, directing, co-ordinating and controlling. The following list includes these terms and some others that might also be considered to be part of the activities of managers and supervisors. 1 Planning This activity involves the setting of objectives and targets, the making of predictions, anticipating problems, and planning for future demands. Thus, for example, a production manager in setting the production budget for the coming year might plan for 1000 items of product X to be produced. 2 Organizing This involves ensuring that the right resources are available at the right time so that work may proceed according to plan. Thus, for example, a sales manager might organize his/her staff so that there are sales representatives covering each area of the country. 3 Directing This involves guiding and supervising subordinates, motivat-ing them to do the job and maintaining morale.

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  Exploring Management

  • John R. Schermerhorn, Jr., Daniel G. Bachrach(Authors)
  • 2017(Publication Date)
  • Wiley

    (Publisher)

  Shouldn’t organi- zations function the same ways? Can you see advantages of speed, flexibility, efficiency, and accomplishment for organizations that develop virtual capabilities among their internal com- ponents and in their external linkages? 148 CHAPTER 8 Organization Structure and Design Study Guide Takeaway 8.2 What Are the Most Common Types of Organization Structures? Terms to Define Cross-functional team Customer structure Departmentalization Divisional structure Functional chimneys or functional silos problem Functional structure Geographic structure Horizontal structures Matrix structure Network structure Product structure Team structure Virtual organization Rapid Review • Functional structures group people using similar skills to perform similar activities. • Divisional structures group people who work on a similar product, work in the same geographic region, or serve the same customers. • A matrix structure uses permanent cross-functional teams to try to gain the advantages of both the functional and divisional approaches. • Team structures make extensive use of permanent and temporary teams, often cross-functional ones, to improve communication, cooperation, and problem solving. • Network structures maintain a staff of core full-time employees and use contract services and strate- gic alliances to accomplish many business needs. Questions for Discussion 1. Why use functional structures if they are prone to functional chimneys problems? 2. Could a matrix structure improve performance for an organization familiar to you? 3.

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  Organisational Behaviour

  • Gert Alblas, Ella Wijsman(Authors)
  • 2021(Publication Date)
  • Routledge

    (Publisher)

  Due to their slight horizontal and vertical differentiation, limited standardisation and formalisation and the independence of the organisational units (decentralisation), these organisations are loosely connected systems. Loosely connected Disruptions in one part of the organisation consequently have less impact systems on other parts of the organisation. Because tasks are less standardised and employees have greater opportunity to vary their approach to their work, it is possible to respond more quickly and effectively to different circumstances. An organic structure therefore provides more opportunities to respond flexibly to changed requirements of an internal or external nature. The characteristics of a mechanistic and an organic structure are shown in Figure 7.16. FIGURE 7.16 Dimensions of organic and mechanical organisational structures Organic structure Slight horizontal and vertical differentiation Limited standardisation and formalisation Selective decentralisation Horizontal and lateral information channels Organisation A: more organic structure Mechanistic structure Strong horizontal and vertical differentiation Strong standardisation and formalisation Centralisation Vertical information channels Organisation B: more mechanistic structure § 7.10 Developments in structural design The structural form of an organisation is largely determined by the following factors: • Size. The size of an organisation is a function of the number of its employees, the number of services and/or products it supplies and the number of markets and geographical areas it services. • Complexity. The complexity of an organisation is a function of the complexity of its environment. • Dynamics. Dynamics are the speed at which the environment in which the organisation is functioning changes.

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  Project Management

  A Systems Approach to Planning, Scheduling, and Controlling

  • Harold Kerzner(Author)
  • 2022(Publication Date)
  • Wiley

    (Publisher)

  3 105 3.0 INTRODUCTION During the past 50 years there has been a so-called hidden revolution in the introduction and development of new organizational structures. Management has come to realize that organizations must be dynamic in nature; that is, they must be capable of rapid restructuring should environmental conditions so dictate. These environmental factors evolved from the increasing competitiveness of the market, changes in technology, and a requirement for better control of resources for multiproduct firms. Much has been written about how to identify and interpret those signs that indicate that a new organizational form may be necessary. Some signs include underutilization of talent, frequent inability to meet the constraints, and the lack of a cooperative culture. Unfortunately, many companies do not realize the necessity for organizational change until it is too late. Management looks exter-nally (i.e., to the environment) rather than internally for solutions to problems. A typical example would be that new product costs are ris-ing while the product life cycle may be decreasing. Should emphasis be placed on lowering costs or developing new products? If we assume that an organizational system is composed of both human and nonhuman resources, then we must analyze the sociotechnical subsystem whenever organizational changes are being considered. The Organizational Structures PMBOK is a registered mark of the Project Management Institute, Inc. PMBOK ® Guide, 6th Edition 2.4 Organizational Systems 2.4.2 Organizational Structure Types Chapter 9 Project Resource Management PMBOK ® Guide, 7th Edition 3.0 Organization Standard for Project Management 2.3 Functions Associated with Projects 2.3.4.3 Organization 2.4 The Project Environment 3.2 Create a Collaborative Project Team Environment 106 ORGANIZATIONAL STRUCTURES social system is represented by the organization’s personnel and their group behavior.

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