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Module 5

The document discusses different types of organizational structures that companies can adopt. It describes hierarchical, functional, horizontal/flat, and divisional organizational structures. Hierarchical structures have a clear chain of command from top to bottom, while functional structures organize employees by their skills and department. Horizontal structures have few management levels. Divisional structures give business divisions autonomy like separate companies. The document also outlines market-based, product-based, geographic, matrix, team-based, and network organizational structures.

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Josh Laxa
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64 views

Module 5

The document discusses different types of organizational structures that companies can adopt. It describes hierarchical, functional, horizontal/flat, and divisional organizational structures. Hierarchical structures have a clear chain of command from top to bottom, while functional structures organize employees by their skills and department. Horizontal structures have few management levels. Divisional structures give business divisions autonomy like separate companies. The document also outlines market-based, product-based, geographic, matrix, team-based, and network organizational structures.

Uploaded by

Josh Laxa
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Module 5

Organization – Its Types and Structures


Objectives: At the end of this lesson, you will
be able to:
• Analyze the nature of organizations and
types of organization structures.
Definition and Nature
of Organizing
Organizing Defined
Organizing is a management function which
relates to the structuring of resources and abilities to
accomplish objectives in an efficient and effective manner. the
aim of organizing activities is to have a collection of people in
the organization who perform activities for a specific purpose.
Organization Structure
Defined
An organizational structure is a visual diagram of a company that
describes what
employees do, whom they report to, and how decisions are made
across the business.
Organizational structures can use functions, markets, products,
geographies, or processes as
their guide, and cater to businesses of specific sizes and industries.
(Devaney, 2020)
Types of Organization
Structures
Hierarchical Organizational
Structure:
Sometimes referred as pyramid-shaped organizational chart, this is
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.
Functional Organizational
Structure:
Similar to a hierarchical organizational structure, a functional org
structure starts with positions with the highest levels of
responsibility at the top and goes down from there. Primarily,
though, employees are organized according to their specific skills
and their corresponding function in the company. Each separate
department is managed independently.
Horizontal or Flat
Organizational Structure:
A horizontal or flat organizational structure fits companies with few
levels between upper management and staff-level employees. Many
start-up businesses use a horizontal org structure before they grow
large enough to build out different departments, but some
organizations maintain this structure since it encourages less
supervision and more involvement from all employees.
Divisional Organizational
Structure:
In divisional organizational structures, a company’s divisions have
control over their own resources, essentially operating like their own
company within the larger organization. Each division can have its
own marketing team, sales team, IT team, etc. This structure works
well for large companies as it empowers the various divisions to
make decisions without everyone having to report to just a few
executives.
Market-based divisional org
structure:
Divisions are separated by market, industry, or customer type. A
large consumer goods company, like Target or Walmart, might
separate its durable goods (clothing, electronics, furniture, etc.) from
its food or logistics divisions.
Product-based divisional org
structure:
Divisions are separated by product line. For example, a tech
company might have a division dedicated to its cloud offerings,
while the rest of the divisions focus on the different software
offerings––e.g., Adobe and its creative suite of Illustrator,
Photoshop, InDesign, etc.
Geographic divisional org
structure:
Divisions are separated by region, territories, or districts, offering
more effective localization and logistics. Companies might establish
satellite offices across the country or the globe in order to stay close
to their customers.
Matrix Organizational
Structure:
A matrix organizational chart looks like a grid, and it shows cross-
functional teams that form for special projects. For example, an
engineer may regularly belong to the engineering department (led by
an engineering director) but work on a temporary project (led by a
project manager). The matrix org chart accounts for both of these
roles and reporting relationships.
Team-based Organizational
Structure:
A team-based organizational structure groups employees according
to (obviously) teams. A team organizational structure is meant to
disrupt the traditional hierarchy, focusing more on problem solving,
cooperation, and giving employees more control.
Network Organizational
Structure:
These days, few businesses have all their services under one roof,
and juggling the multitudes of vendors, subcontractors, freelancers,
offsite locations, and satellite offices can get confusing. A network
organizational structure makes sense of the spread of resources. It
can also describe an internal structure that focuses more on open
communication and relationships rather than hierarchy.

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