Organizational Structure - strategy, levels, examples, advantages, manager, model, type, company (2023)

Organizational Structure - strategy, levels, examples, advantages, manager, model, type, company (1)

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Organizational structure refers to the way that an organization arranges people and jobs so that its work can be performed and its goals can be met. When a work group is very small and face-to-face communication is frequent, formal structure may be unnecessary, but in a larger organization decisions have to be made about the delegation of various tasks. Thus, procedures are established that assign responsibilities for various functions. It is these decisions that determine the organizational structure.

In an organization of any size or complexity, employees' responsibilities typically are defined by what they do, who they report to, and for managers, who reports to them. Over time these definitions are assigned to positions in the organization rather than to specific individuals. The relationships among these positions are illustrated graphically in an organizational chart (see Figures 1a and 1b). The best organizational structure for any organization depends on many factors including the work it does; its size in terms of employees, revenue, and the geographic dispersion of its facilities; and the range of its businesses (the degree to which it is diversified across markets).

There are multiple structural variations that organizations can take on, but there are a few basic principles that apply and a small number of common patterns. The following sections explain these patterns and provide the historical context from which some of them arose. The first section addresses organizational structure in the twentieth century. The second section provides additional details of traditional, vertically-arranged organizational structures. This is followed by descriptions of several alternate organizational structures including those arranged by product, function, and geographical or product markets. Next is a discussion of combination structures, or matrix organizations. The discussion concludes by addressing emerging and potential future organizational structures.

ORGANIZATIONAL STRUCTURE
DURING THE TWENTIETH CENTURY

Understanding the historical context from which some of today's organizational structures have developed helps to explain why some structures are the way they are. For instance, why are the old, but still operational steel mills such as U.S. Steel and Bethlehem Steel structured using vertical hierarchies? Why are newer steel mini-mills such as Chaparral Steel structured more horizontally, capitalizing on the innovativeness of their employees? Part of the reason, as this section discusses, is that organizational structure has a certain inertia—the idea borrowed from physics and chemistry that something in motion tends to continue on that same path. Changing an organization's structure is a daunting managerial task, and the immensity of such a project is at least partly responsible for why organizational structures change infrequently.

At the beginning of the twentieth century the United States business sector was thriving. Industry was shifting from job-shop manufacturing to mass production, and thinkers like Frederick Taylor in the United States and Henri Fayol in France studied the new systems and developed principles to determine how to structure organizations for the greatest efficiency and productivity, which in their view was very much like a machine. Even before this, German sociologist and engineer Max Weber had concluded that when societies embrace capitalism, bureaucracy is the inevitable result. Yet, because his writings were not translated into English until 1949, Weber's work had little influence on American management practice until the middle of the twentieth century.

Management thought during this period was influenced by Weber's ideas of bureaucracy, where power is ascribed to positions rather than to the individuals holding those positions. It also was influenced by Taylor's scientific management, or the "one best way" to accomplish a task using scientifically-determined studies of time and motion. Also influential were Fayol's ideas of invoking unity within the chain-of-command, authority, discipline, task specialization, and other aspects of organizational power and job separation. This created the context for vertically-structured organizations characterized by distinct job classifications and top-down authority structures, or what became known as the traditional or classical organizational structure.

Job specialization, a hierarchical reporting structure through a tightly-knit chain-of-command, and the subordination of individual interests to the superordinate goals of the organization combined to result in organizations arranged by functional departments with order and discipline maintained by rules, regulations, and standard operating procedures. This classical view, or bureaucratic structure, of organizations was the dominant pattern as small organizations grew increasingly larger during the economic boom that occurred from the 1900s until the Great Depression of the 1930s. Henry Ford's plants were typical of this

Organizational Structure - strategy, levels, examples, advantages, manager, model, type, company (2)

Figure 1a
Organizational Structure

(Video) Organisational Structures Explained

growth, as the emerging Ford Motor Company grew into the largest U.S. automaker by the 1920s.

The Great Depression temporarily stifled U.S. economic growth, but organizations that survived emerged with their vertically-oriented, bureaucratic structures intact as public attention shifted to World War II. Postwar rebuilding reignited economic growth, powering organizations that survived the Great Depression toward increasing size in terms of sales revenue, employees, and geographic dispersion. Along with increasing growth, however, came increasing complexity. Problems in U.S. business structures became apparent and new ideas began to appear. Studies of employee motivation raised questions about the traditional model. The "one best way" to do a job gradually disappeared as the dominant logic. It was replaced by concerns that traditional organizational structures might prevent, rather than help, promote creativity and innovation—both of which were necessary as the century wore on and pressures to compete globally mounted.

TRADITIONAL ORGANIZATIONAL
STRUCTURE

While the previous section explained the emergence of the traditional organizational structure, this section provides additional detail regarding how this affected the practice of management. The structure of every organization is unique in some respects, but all organizational structures develop or are consciously designed to enable the organization to accomplish its work. Typically, the structure of an organization evolves as the organization grows and changes over time.

Researchers generally identify four basic decisions that managers have to make as they develop an organizational structure, although they may not be explicitly aware of these decisions. First, the organization's work must be divided into specific jobs. This is referred to as the division of labor. Second, unless the organization is very small, the jobs must be grouped in some way, which is called departmentalization. Third, the number of people and jobs that are to be grouped together must be decided. This is related to the number of people that are to be managed by one person, or the span of control—the number of employees reporting to a single manager. Fourth, the way decision-making authority is to be distributed must be determined.

In making each of these design decisions, a range of choices are possible. At one end of the spectrum, jobs are highly specialized with employees performing a narrow range of activities, while at the other end of the spectrum employees perform a variety of tasks. In

Organizational Structure - strategy, levels, examples, advantages, manager, model, type, company (3)

Figure 1b
Organizational Structure

traditional bureaucratic structures, there is a tendency to increase task specialization as the organization grows larger. In grouping jobs into departments, the manager must decide the basis on which to group them. The most common basis, at least until the last few decades, was by function. For example, all accounting jobs in the organization can be grouped into an accounting department, all engineers can be grouped into an engineering department, and so on. The size of the groupings also can range from small to large depending on the number of people the managers supervise. The degree to which authority is distributed throughout the organization can vary as well, but traditionally structured organizations typically vest final decision-making authority by those highest in the vertically structured hierarchy. Even as pressures to include employees in decision-making increased during the 1950s and 1960s, final decisions usually were made by top management. The traditional model of organizational structure is thus characterized by high job specialization, functional departments, narrow spans of control, and centralized authority. Such a structure has been referred to as traditional, classical, bureaucratic, formal, mechanistic, or command and control. A structure formed by choices at the opposite end of the spectrum for each design decision is called unstructured, informal, or organic.

The traditional model of organizational structure is easily represented in a graphical form by an organizational chart. It is a hierarchical or pyramidal structure with a president or other executive at the top, a small number of vice presidents or senior managers under the president, and several layers of management below this, with the majority of employees at the bottom of the pyramid. The number of management layers depends largely on the size of the organization. The jobs in the traditional organizational structure usually are grouped by function into departments such as accounting, sales, human resources, and so. Figures 1a and 1b illustrate such an organization grouped by functional areas of operations, marketing and finance.

(Video) Types of Organizational Structure in management

BASIS FOR DEPARTMENTALIZATION

As noted in the previous section, many organizations group jobs in various ways in different parts of the organization, but the basis that is used at the highest level plays a fundamental role in shaping the organization. There are four commonly used bases.

FUNCTIONAL DEPARTMENTALIZATION.

Every organization of a given type must perform certain jobs in order do its work. For example, key functions of a manufacturing company include production, purchasing, marketing, accounting, and personnel. The functions of a hospital include surgery, psychiatry, nursing, housekeeping, and billing. Using such functions as the basis for structuring the organization may, in some instances, have the advantage of efficiency. Grouping jobs that require the same knowledge, skills, and resources allows them to be done efficiently and promotes the development of greater expertise. A disadvantage of functional groupings is that people with the same skills and knowledge may develop a narrow departmental focus and have difficulty appreciating any other view of what is important to the organization; in this case, organizational goals may be sacrificed in favor of departmental goals. In addition, coordination of work across functional boundaries can become a difficult management challenge, especially as the organization grows in size and spreads to multiple geographical locations.

GEOGRAPHIC DEPARTMENTALIZATION.

Organizations that are spread over a wide area may find advantages in organizing along geographic lines so that all the activities performed in a region are managed together. In a large organization, simple physical separation makes centralized coordination more difficult. Also, important characteristics of a region may make it advantageous to promote a local focus. For example, marketing a product in Western Europe may have different requirements than marketing the same product in Southeast Asia. Companies that market products globally sometimes adopt a geographic structure. In addition, experience gained in a regional division is often excellent training for management at higher levels.

PRODUCT DEPARTMENTALIZATION.

Large, diversified companies are often organized according to product. All the activities necessary to produce and market a product or group of similar products are grouped together. In such an arrangement, the top manager of the product group typically has considerable autonomy over the operation. The advantage of this type of structure is that the personnel in the group can focus on the particular needs of their product line and become experts in its development, production, and distribution. A disadvantage, at least in terms of larger organizations, is the duplication of resources. Each product group requires most of the functional areas such as finance, marketing, production, and other functions. The top leadership of the organization must decide how much redundancy it can afford.

CUSTOMER/MARKET DEPARTMENTALIZATION.

An organization may find it advantageous to organize according to the types of customers it serves. For example, a distribution company that sells to consumers, government clients, large businesses, and small businesses may decide to base its primary divisions on these different markets. Its personnel can then become proficient in meeting the needs of these different customers. In the same way, an organization that provides services such as accounting or consulting may group its personnel according to these types of customers. Figure 2 depicts an organization grouped by customers and markets.

Organizational Structure - strategy, levels, examples, advantages, manager, model, type, company (5)

Figure 3
Matrix Structure

MATRIX ORGANIZATIONAL STRUCTURE

Some organizations find that none of the afore-mentioned structures meet their needs. One approach that attempts to overcome the inadequacies is the matrix structure, which is the combination of two or more different structures. Functional departmentalization commonly is combined with product groups on a project basis. For example, a product group wants to develop a new addition to its line; for this project, it obtains personnel from functional departments such as research, engineering, production, and marketing. These personnel then work under the manager of the product group for the duration of the project, which can vary greatly. These personnel are responsible to two managers (as shown in Figure 3).

(Video) Business Strategy 14 - Organization Structure & Controls

One advantage of a matrix structure is that it facilitates the use of highly specialized staff and equipment. Rather than duplicating functions as would be done in a simple product department structure, resources are shared as needed. In some cases, highly specialized staff may divide their time among more than one project. In addition, maintaining functional departments promotes functional expertise, while at the same time working in project groups with experts from other functions fosters cross-fertilization of ideas.

The disadvantages of a matrix organization arise from the dual reporting structure. The organization's top management must take particular care to establish proper procedures for the development of projects and to keep communication channels clear so that potential conflicts do not arise and hinder organizational functioning. In theory at least, top management is responsible for arbitrating such conflicts, but in practice power struggles between the functional and product manager can prevent successful implementation of matrix structural arrangements. Besides the product/function matrix, other bases can be related in a matrix. Large multinational corporations that use a matrix structure most commonly combine product groups with geographic units. Product managers have global responsibility for the development, manufacturing, and distribution of their own product or service line, while managers of geographic regions have responsibility for the success of the business in their regions.

STRATEGIC BUSINESS UNITS

As corporations become very large they often restructure as a means of revitalizing the organization. Growth of a business often is accompanied by a growth in bureaucracy, as positions are created to facilitate developing needs or opportunities. Continued changes in the organization or in the external business environment may make this bureaucracy a hindrance rather than a help, not simply because of the size or complexity of the organization but also because of a sluggish bureaucratic way of thinking. One approach to encourage new ways of thinking and acting is to reorganize parts of the company into largely autonomous groups,

Organizational Structure - strategy, levels, examples, advantages, manager, model, type, company (6)

Figure 4
SBU Structure

called strategic business units (SBUs). Such units generally are set up like separate companies, with full profit and loss responsibility invested in the top management of the unit—often the president of the unit and/or a senior vice president of the larger corporation. This manager is responsible to the top management of the corporation. This arrangement can be seen as taking any of the aforementioned departmentalization schemes one step further. The SBUs might be based on product lines, geographic markets, or other differentiating factors. Figure 4 depicts SBUs organized by geographic area.

EMERGING TRENDS
IN ORGANIZATIONAL STRUCTURE

Except for the matrix organization, all the structures described above focus on the vertical organization; that is, who reports to whom, who has responsibility and authority for what parts of the organization, and so on. Such vertical integration is sometimes necessary, but may be a hindrance in rapidly changing environments. A detailed organizational chart of a large corporation structured on the traditional model would show many layers of managers; decision making flows vertically up and down the layers, but mostly downward. In general terms, this is an issue of interdependence.

In any organization, the different people and functions do not operate completely independently. To a greater or lesser degree, all parts of the organization need each other. Important developments in organizational design in the last few decades of the twentieth century and the early part of the twenty-first century have been attempts to understand the nature of interdependence and improve the functioning of organizations in respect to this factor. One approach is to flatten the organization, to develop the horizontal connections and de-emphasize vertical reporting relationships. At times, this involves simply eliminating layers of middle management. For example, some Japanese companies—even very large manufacturing firms—have only four levels of management: top management, plant management, department management, and section management. Some U.S. companies also have drastically reduced the number of managers as part of a downsizing strategy; not just to reduce salary expense, but also to streamline the organization in order to improve communication and decision making.

In a virtual sense, technology is another means of flattening the organization. The use of computer networks and software designed to facilitate group work within an organization can speed communications and decision making. Even more effective is the use of intranets to make company information readily accessible throughout the organization. The rapid rise of such technology has made virtual organizations and boundarlyless organizations possible, where managers, technicians, suppliers, distributors, and customers connect digitally rather than physically.

A different perspective on the issue of interdependence can be seen by comparing the organic model of organization with the mechanistic model. The traditional, mechanistic structure is characterized as highly complex because of its emphasis on job specialization, highly formalized emphasis on definite procedures and protocols, and centralized authority and accountability. Yet, despite the advantages of coordination that these structures present, they may hinder tasks that are interdependent. In contrast, the organic model of organization is relatively simple because it de-emphasizes job specialization, is relatively informal, and decentralizes authority. Decision-making and goal-setting processes are shared at all levels, and communication ideally flows more freely throughout the organization.

A common way that modern business organizations move toward the organic model is by the implementation of various kinds of teams. Some organizations establish self-directed work teams as the basic production group. Examples include production cells in a manufacturing firm or customer service teams in an insurance company. At other organizational levels, cross-functional teams may be established, either on an ad hoc basis (e.g., for problem solving) or on a permanent basis as the regular means of conducting the organization's work. Aid Association for Lutherans is a large insurance organization that has adopted the self-directed work team approach. Part of the impetus toward the organic model is the belief that this kind of structure is more effective for employee motivation. Various studies have suggested that steps such as expanding the scope of jobs, involving workers in problem solving and planning, and fostering open communications bring greater job satisfaction and better performance.

(Video) Corporate Level Strategy

Saturn Corporation, a subsidiary of General Motors (GM), emphasizes horizontal organization. It was started with a "clean sheet of paper," with the intention to learn and incorporate the best in business practices in order to be a successful U.S. auto manufacturer. The organizational structure that it adopted is described as a set of nested circles, rather than a pyramid. At the center is the self-directed production cell, called a Work Unit. These teams make most, if not all, decisions that affect only team members. Several such teams make up a wider circle called a Work Unit Module. Representatives from each team form the decision circle of the module, which makes decisions affecting more than one team or other modules. A number of modules form a Business Team, of which there are three in manufacturing. Leaders from the modules form the decision circle of the Business Team. Representatives of each Business Team form the Manufacturing Action Council, which oversees manufacturing. At all levels, decision making is done on a consensus basis, at least in theory. The president of Saturn, finally, reports to GM headquarters.

THE FUTURE

Industry consolidation—creating huge global corporations through joint ventures, mergers, alliances, and other kinds of interorganizational cooperative efforts—has become increasingly important in the twenty-first century. Among organizations of all sizes, concepts such as agile manufacturing, just-in-time inventory management, and ambidextrous organizations are impacting managers' thinking about their organizational structure. Indeed, few leaders were likely to blindly implement the traditional hierarchical structure common in the first half of the century. The first half of the twentieth century was dominated by the one-size-fits-all traditional structure. The early twenty-first century has been dominated by the thinking that changing organizational structures, while still a monumental managerial challenge, can be a necessary condition for competitive success.

SEE ALSO: Line-and-Staff Organizations ; Organizational Chart ; Organizational Development

Howard Distelzweig

Revised by Scott B. Droege

FURTHER READING:

Brews, Peter J., and Christopher L. Tucci. "Exploring the Structural Effects of Internetworking." Strategic Management Journal 25, no. 5 (2004): 429–452.

Hansen, Morten T., and Nitin Nohria. "How to Build Collaborative Advantage." MIT Sloan Management Review 46, no. 1 (2004): 22–31.

Lumpkin, G.T., and Gregory G. Dess. "E-Business Strategies and Internet Business Models: How the Internet Adds Value." Organizational Dynamics 33, no. 2 (2004): 161–173.

O'Reilly, Charles A., III, and Michael L. Tushman. "The Ambidextrous Organization." Harvard Business Review 82, no. 4 (2004): 74–82.

(Video) Project Management Organizational Structure - 3 Types: Functional, Matrix & Projectized | AIMS UK

Ticoll, David. "Get Self-Organized." Harvard Business Review 82, no. 9 (2004): 18–20.

FAQs

What are the 4 types of organizational structures examples? ›

The four types of organizational structures are functional, multi-divisional, flat, and matrix structures. Others include circular, team-based, and network structures.

What are the 4 types of organizational structures the four types of organizational structures are functional divisional Flatarchy and matrix structures? ›

The four types are:
  • Functional structure. In a functional structure, organizations are divided into specialized groups with specific roles and duties. ...
  • Divisional structure. In a divisional structure, various teams work alongside each other toward a single, common goal. ...
  • Flatarchy. ...
  • Matrix structure.

What are the 4 types of organizational structures with diagram? ›

4 Main Types of Organisation Structure (With Diagram)
  • Organisation Structure Type # 1. Line Organization:
  • Organisation Structure Type # 2. Staff Organisation:
  • Organisation Structure Type # 3. Functional Organisation:
  • Organisation Structure Type # 4. Line and Staff Organisation:

What are the 4 types of organizational design models layouts called? ›

Traditional organizational structures come in four general types – functional, divisional, matrix and flat – but with the rise of the digital marketplace, decentralized, team-based org structures are disrupting old business models.

What are the 5 levels of organization give an example of each? ›

The major levels of organization in the body, from the simplest to the most complex are: atoms, molecules, organelles, cells, tissues, organs, organ systems, and the human organism.

What are the 5 best types of organizational structure? ›

5 Types of Organizational Structures for Small Business
  • Functional reporting structure. The functional reporting structure is one of the most common types of org structures. ...
  • Divisional or product reporting structure. ...
  • Process-based structure. ...
  • Matrix structure. ...
  • Flat structure.
6 Jan 2022

What are the four 4 possible forms of business organizations? ›

An overview of the four basic legal forms of organization: Sole Proprietorship; Partnerships; Corporations and Limited Liability Company follows.

What are the 5 structural elements of an organization? ›

Five elements create an organizational structure: job design, departmentation, delegation, span of control and chain of command. These elements comprise an organizational chart and create the organizational structure itself. "Departmentation" refers to the way an organization structures its jobs to coordinate work.

What are the 5 components of organizational architecture and explain each? ›

Nail the five elements of organizational architecture: strategy, structure, systems, skills, and culture. Identify misalignments.

What is the organizational system 4 Elements? ›

Edgar Schein, a prominent organizational psychologist, identified four key elements of an organization's structure: common purpose, coordinated effort, division of labor, and hierarchy of authority. Each of the four elements represents an essential component of an effective structure.

What are the six 6 types of organizational structures answer text? ›

How many types of organizational structures are there?
  • Hierarchical structure (also known as line structure)
  • Functional structure.
  • Divisional structure (also known as multidivisional structure)
  • Flatarchy structure (also known as horizontal, or flat, structure)
  • Matrix structure.
  • Team structure.
  • Network structure.

How many organizational models are there? ›

The four basic forms of organizational structure are functional, divisional, matrix, and flat structures. Functional organizational structures divide your company teams based on job functions and responsibilities.

Which organizational model is best? ›

The project-based structure features the best of both the traditional line and functional organizational structures: it's simple, with the first tiers answering only to a direct supervisor.

What are the 5 main levels of the organization of life from smallest to largest? ›

The levels, from smallest to largest, are: molecule, cell, tissue, organ, organ system, organism, population, community, ecosystem, biosphere.

What are the 5 levels of organization in your body from smallest to largest? ›

Six general levels of the organization listed from smallest to largest are chemical, cellular, tissue, organ, organ system, and organism levels.

What are the 5 levels of organization in our bodies from largest smallest? ›

It is convenient to consider the structures of the body in terms of fundamental levels of organization that increase in complexity, such as (from smallest to largest): chemicals, cells, tissues, organs, organ systems, and an organism.

What are the types of organization structure briefly explain each? ›

Organizations large and small can achieve higher sales and other profit by properly matching their needs with the structure they use to operate. There are three main types of organizational structure: functional structure, divisional structure and a blend of the two, called matrix structure.

What are the 8 types of organizational structure? ›

The following are eight types of organizational structure, with explanations of how you can use them:
  • Functional structure. ...
  • Line structure. ...
  • Line-and-staff structure. ...
  • Matrix structure. ...
  • Divisional structure. ...
  • Organic structure. ...
  • Virtual structure. ...
  • Project structure.

What are the 4 types of business organization and what are their characteristics? ›

There are 4 main types of business organization: sole proprietorship, partnership, corporation, and Limited Liability Company, or LLC. Below, we give an explanation of each of these and how they are used in the scope of business law.

What is a company and types of companies? ›

A company is a body corporate or an incorporated business organization registered under the companies act. It can be a limited or an unlimited company, private or a public company, company limited by guarantee or a company having a share capital, or a community interest company.

What are the 3 types of business organizations and their characteristics? ›

Here's a rundown of what you need to know about each one.
  • Sole Proprietorship. In a sole proprietorship, you're the sole owner of the business. ...
  • Partnership. A partnership is a non-incorporated business created between two or more people. ...
  • Corporation. A corporation is a legal entity separate from its shareholders.
25 Feb 2021

What are the 4 importance of an organizational structure? ›

Structure will give employees more clarity, help manage expectations, enable better decision-making and provide consistency. Organizational charts also assign responsibility, organize workflow and make sure important tasks are completed on time.

What are the 6 methods of organization? ›

  • Chronological Order of Information. Chronological order places each piece of information into a sequence of dates or time frames. ...
  • Order of Importance. ...
  • Comparison and Contrast. ...
  • Geographical Organization Method. ...
  • Inductive Method of Organization. ...
  • Deductive Organization Method.

What are the six 6 key components of management structure? ›

Management experts use the six basic elements of organizational structure to devise the right plan for a specific company. These elements are: departmentalization, chain of command, span of control, centralization or decentralization, work specialization and the degree of formalization.

What is organizational structure highlight the six 6 key elements of the process developing or changing the organizational structure? ›

The six elements of organizational structure are job design, job grouping, department design, organizational hierarchy, authority designation and coordination between departments.

What is organizational structure examples? ›

Organizational structure examples of this type include insurance companies, engineering firms, law firms, regulatory agencies, etc. In other words, organizations that need isolated technical advice to assist employees who handle or manage the day-to-day operations on the front line.

What are the 4 types of organizational structures PPT? ›

The 4 Types Of Organizational Structure PowerPoint Template includes an org chart with three levels. Each level has a different color and has a text holder. Using this slide, you can explain the administrative, functional, divisional, and matrix structures.

What are the 5 main organizational factors? ›

Organizational influences are divided into five groups, which are organizational cultures and styles, organizational communication, organizational structures, organizational process assets and enterprise environmental factors (PMI, 2013).

What are the 4 elements of organizational behavior explain with examples? ›

But regardless of how much material there is, there are four key elements to keep in mind when applying organizational behavior theory to the workplace. They are people, structure, technology, and environment.

What is the 4 management? ›

What Are the Four Functions of Management? The four functions of management are planning, organizing, leading and controlling. In order to be a successful manager, you must do all four while managing your work and team. These are the foundations of any professional managerial position.

What are the 4 types of strategies under strategic analysis? ›

The strategies at each level of the organization are known by the name of the level. Corporate level strategy. Business level strategy. Functional level strategy.

What are the 6 types of modern organizational design theories? ›

The six primary organizational theories include:
  • Classical theory. Classical theory can address the primary aspects of a business's formal organizational structure. ...
  • Neo-classical theory. ...
  • Modern theory. ...
  • Contingency theory. ...
  • Motivation theory. ...
  • Open systems theory.

How do you create an organizational chart in Word? ›

On the Insert tab, in the Illustrations group, click SmartArt. In the Choose a SmartArt Graphic gallery, click Hierarchy, click an organization chart layout (such as Organization Chart), and then click OK.

Why are organizational models important? ›

Organizational structures are important because they help businesses implement efficient decision-making processes. By assigning specialized roles to lower-level employees, businesses can make better decisions faster.

What is an example of organizational structure? ›

The pyramid-shaped organizational chart we referred to earlier is known as a hierarchical org chart. It's the most common type of organizational structure—the chain of command goes from the top (e.g., the CEO or manager) down (e.g., entry-level and low-level employees), and each employee has a supervisor.

What are some examples of organization? ›

There are a variety of legal types of organizations, including corporations, governments, non-governmental organizations, political organizations, international organizations, armed forces, charities, not-for-profit corporations, partnerships, cooperatives, and educational institutions, etc.

What is an example of a functional organizational structure? ›

A great example of this is Amazon's corporate structure. The functional organization structure is ideal for a business that deals primarily with operations, such as e-commerce, logistics, or manufacturing, where specialist employees fill skilled roles.

Which is the best example of organization? ›

Common examples of workplace organization include:
  • Establish a desktop filing system. ...
  • Pin applications and notes to your taskbar. ...
  • Bookmark important pages. ...
  • Follow a file naming structure. ...
  • Purchase additional storage. ...
  • Implement organizational procedures and policies. ...
  • Schedule appointments and meetings electronically.
1 Mar 2021

What are three organizational examples? ›

Three forms of organizations describe the organizational structures that are used by most companies today: functional, departmental and matrix.

Which type of organizational structure is best for a company? ›

A traditional line organizational structure is truly the place to start for most companies, especially the smaller ones that don't necessarily comprise a vast number of departments or require a major number of links in the chain of command/communication.

What are the different types of organization explain each of them? ›

There are different types of organizations that a company can adopt, such as functional, flat, matrix, and divisional organizations. When determining which type of organization to take on, there are several factors that should be taken into account.

What are the 4 main types of business organizations and explain each? ›

There are 4 main types of business organization: sole proprietorship, partnership, corporation, and Limited Liability Company, or LLC. Below, we give an explanation of each of these and how they are used in the scope of business law.

What are the types of organization explain in detail? ›

What are the types of organization? There are 5 types of organizations such as Line Structure Organization, Line and Staff Organization, Functional Structure Organization, Matrix Structure Organization and Project Structure Organization.

Why do companies change? ›

Some common causes of change in business include economic factors, societal reasons, innovative leadership, growth in the business and competitors' actions.

What is an example of management? ›

Controlling and delivering change. For example, a process of accepting, reviewing and prioritizing change requests from stakeholders.

What's planning in management? ›

Planning is the function of management that involves setting objectives and determining a course of action for achieving those objectives. Planning requires that managers be aware of environmental conditions facing their organization and forecast future conditions.

What is a functional company? ›

A functional organization is a vertical hierarchy. The company is divided into different functional departments with employees who specialize in specific tasks. Functional departments usually operate in silos because each group has its own independent vertical management structure.

What are some examples of functional work groups? ›

Accounting, marketing, finance and human resources are examples of functional work teams. Functional team members usually have different responsibilities but all work to perform the same function of the department.

Which companies use a functional structure? ›

Airtel has a functional structure which is one of the best organizational structure examples. It has directors for supply chain, marketing, human resources, technology, customer care, legal works and so on.

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