Types of Organizational Structures

It is important for any organization or business to have a clear structure, that recognises and defines employees roles and responsibilities, and ultimately provides the framework for accomplishing the goals and aims of the company. There are a number of factors which decide how formal the structure needs to be, how complex, and which template it should follow — factors such as size and location of the company, how much management is needed, and the size and divisions of the workforce.

Organization structure types

The three main types of organizational structure are as follows: hierarchical, flat, and matrix. A smaller company, or one with few levels of middle management, might have a more organic structure — there is a shared knowledge base and centralized decision making; all parts of the workforce have common interaction with each other. But in a larger company made up of various divisions and teams, who may have only brief interactions and essentially work independently from each other, it is crucial to have a structure in place that clearly defines the decision making and supervisory process.

 

 

Hierarchical organization structure

Perhaps the most common form of organizational structure is hierarchical. This structure can be represented as a pyramid, with a single entity in authority at the top, with subsequent levels of power beneath them. Each member of the pyramid reports only to their direct subordinates or superiors, limiting the amount of communication overhead, which can be seen both as an asset or a limitation. It is easy to see where a hierarchical structure would be an effective solution; companies that have offices based in disparate locations, a business that focuses on diversified markets, any organization with need for multiple levels of middle management.

 

 

Flat organization structure

A flat organizational structure differs from a hierarchical one by almost entirely dispensing with middle management; rather than a pyramid, there is a 'flat' layer between staff and executives. In real terms, this means that almost all staff are involved in the decision making process and produce reports centrally — it can be viewed as a typically democratic structure.

 

 

Matrix organization structure

A third form of organizational structure can take the form of a matrix. This structure is commonly found in businesses that have more than one line of reportage. For instance, a company might contain an engineering department with engineering managers who workers report to. However, these workers might also have to liaise with different product or project managers depending on current tasks. Some form of matrix organization is found in most large-scale modern businesses.