Organizational Structures of a Business: Advantages and Types

Organizational Structures of a Business: Advantages and Types

Organizational structures of a company aren´t just hierarchical structures; they define how the company functions. First and foremost an organizational structure serves to define the positions of authority and responsibility within the company.

By establishing an organisational structure within a company, the performance processes are improved, all employees are clear about their position within the company and the results are controlled.

Advantages of defining an organizational structure within a company:

✔  Internal Organization: An organizational structure within a company allows employees to know who is their superior and their role within the company, which also benefits internal communication

✔ Facilitates Processes: By establishing an organizational structure, communication is streamlined and processes are made more efficient, as all employees receive direct orders from their superior.

✔ Reduces Pressure: All the responsibilities do not fall onto one person, they are shared out to different departments based on the task required.

4 TOP types of organizational structures for a business:

There are different types of organisational structures, in some, managerial or responsible positions stand alone and in others these higher positions delegate functions and responsibilities to intermediate managers. Depending on the type of company and its processes, there are different types of organisational structures that can be applied.

1. Hierarchy

It is the oldest organizational structure, also known as pyramidal or linear. It is characterized by the presence of one superior on top which delegates tasks to managers underneath. Between superiors and personnel there is direct authority.
One of the disadvantages of the hierarchic organizational structure is that it can give place to an authority excess.

The organisational structures of a company are not just hierarchical structures; they define how the company functions

2. Matrix

This type of organizational structure is found in companys where tasks are project based or specialised. If the company works on projects, as soon as the task is finished the team will dissolve. One of the advantages of this organizational structure is the increase of productivity thanks to the high specialized nature of the work.

3. Horizontal

This organizational structure is characterized by the elimination of the vast majority of middle managers; this creates a more direct relationship between the superior of the company and the rest of the employees. A benefit that this organizational structure can bring to a company is related to response times because eliminating the presence of middle managers means that orders and responses times are faster.

4. Line and Staff

Characterized as being the organizational structure of a company in which “the staff” made up of persons or departments, perform advisory functions but do not give orders directly to the employees of the company. These advisers give advice or meet needs that the company cannot meet by itself.

Each company has a different nature, needs and objectives and to a large extent, the organizational structure of a company will be the one that helps to fulfil these needs. What is the structure of your company?

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