What is Organisational Structure?
Organisational Structure is the formal system that defines how roles, responsibilities, authority, and communication are organized within a company. It establishes the hierarchy of employees, outlines reporting relationships, and ensures efficient workflow to achieve business goals.
What are the Different Types of Organizational Structures and their Importance?
1. Functional Structure
This structure organizes a company based on departments or functions. It is a traditional structure used in big and small organizations. This structure segregates teams according to their functions. Employees can clearly understand what their specific role is and work accordingly.
2. Divisional structure
Divisional structure divides teams based on products, markets, or geographic locations. Teams work and operate independently as they focus on their specific product or market. As they work independently, they can adapt and respond to the different needs of the market. There is also a lot more accountability here.
3. Matrix structure
This is a mix of functional and divisional structures. Here, employees do not report to just one manager. There is a functional as well as a product/project manager. This structure ensures that teams can work on different projects simultaneously while reporting to their functional departments. The structure promotes better collaboration and flexibility.
4. Flatarchy structure
As the name suggests, this is a mix of flat and hierarchical models. This is a structure implemented in small companies or companies that are yet to make a mark, and must move fast, where decision-making must be quick as well. Employees are given the authority to make certain decisions to help facilitate the same.
« Back to Glossary Index