Types of Organizational Structure
Organizational structure is the system that outlines how an organization should function. It entails how roles, responsibilities, and power should be divided among employees for the better functioning of the organization. There are various types of organizational structure in management we find.
But which one to use depends upon the organization’s nature, size, and objectives to achieve. All organizational structure types have their own benefits and drawbacks. As a manager, you should choose an appropriate type that is understandable to your employees, is goal achievable, and does not cost more to the management.
Here, we will discuss the five most common types of organizational structure organizations are using with their advantages and disadvantages.
Line Organizational Structure
The line organizational structure is the first, oldest, and simplest type. The line of authority is clear, from top to bottom and the manager has control over the organization. The authority has an unbroken line that every employee needs to follow, and the chain of command is there.
All employees have to get an order from the top manager. Employees are responsible for reporting their performance to their immediate supervisor and the supervisor is also responsible for all consequences under his supervision. In a more simple, way there is one head, and all employees work under his/her supervision.
Line organization structure has two types – pure line and departmental line. In a pure line organization structure, all employees do the same job and for effectiveness, grouping is assumed. In a departmental organizational structure, different departments are created and the head is appointed giving balanced authority and responsibility for the right functioning.
Advantages and disadvantages (pros/cons) of line organization:
Advantages/pros:
- It is simple and easy to use.
- Promotes quick decisions.
- Fixation of responsibility.
- Helps to maintain discipline.
- Flexibility in operation.
- Supports effective management.
- Economical for the organization.
Disadvantages/Cons:
- Overloads to the manager.
- Firms become autocratic.
- Inefficiency.
- Problems in coordination.
- Lack of specialization.
- Unsuitable to most of today’s organizations.
Functional Organizational Structure
In a functional organization, the organization’s whole activity is divided into a number of functions and every function is handled by some specialist (staff).
Here, functional authority and specialists take place. The one who is given the function to complete is called a functional specialist and the authority he is given to complete that function is called functional authority.
For example, may a marketing firm divide its task as advertising, marketing, public relations, promotion, etc. And, for completing the task the marketing manager will be handling marketing activities, the promotional manager will promotional activities, and so on.
The basic characteristic of this organization is that the authority given to a specialist is applicable to every member of the organization, not just who work under him, however, it is applicable when related matters arise.
In addition, functional specialists (staff) have no right to make a final decision, this power holds the top manager. They may discuss it by themselves also suggests the manager but for the final decision, they need to have the consent of the manager, fundamentally, the manager does this.
Advantages:
- Helps to achieve specialization.
- Increases efficiency in the organization.
- Establishes a positive competition among specialists (experts).
- Relief to the manager.
- Growth and expansion.
- Suitable for modern organizations.
Line and Staff Organizational Structure
Since we discussed the two types the line and functional organizational structure and understood also what they are. In a simple sense, line and staff organizational structure is the result of the positives aspects of both organizational structures.
Here the positive aspects of both organizations are taken as the main tool to enhance the organizational performance. What is in line organization will also be here such chain of commands will be as it as in addition as in functional organization specialists (staff) will also suggest the managers in taking right actions.
In addition, functional staff does not have the right to give instructions, they only play as an advisory and prepare plans and the line authorities work in the implementation of these plans. This organizational structure is most suited for medium and large organizations.
Advantages:
- It facilitates managerial specialization.
- Greater flexibility in the organization.
- Coordination is maintained in the organization.
- Limited functional authority.
- Practical decisions are made.
- Facilitates growth.
- Relief to the managers.
- Effective utilization of resources.
Disadvantages:
- There may be complications in management.
- May also be a problem conflict.
- Employees may face role confusion.
- High-cost structure since both line and functional organization is combined.
- Over-dependence on staff.
- Inefficient staff.
- Lack of responsibility.
Committee Organizational Structure
In the committee organizational structure, a committee is formed. In such a committee people having different knowledge, backgrounds, and expert in specific filed are grouped and whose main objective is to solve specific problems.
They primarily help and suggest the manager ultimately letting him make the right decision for all members of the organization and its goals. It is obvious that all the problems of the organization cannot be handled by the manager only and if he tries there is a high chance of committing mistakes.
The committee greatly helps the manager in such situations since problems are all-time challenges to the managers. The committee aims to bring a better working environment and effectively achieve desired goals.
The committee in the organization may be of two types – First, the permanent committee performs work on a regular basis and also aids in planning and decisions. Second, the ad-hoc committee, fundamentally formed for solving a specific problem, acts as an advisory and is dissolved when the problem is solved.
Advantages;
- Through the committee, the quality decision can be made.
- Helps in setting an effective objective, plan, and policy.
- Participation in management.
- Reduces conflicts and biases.
- Complex problems are solved.
- Commitment to implementation.
- It also gives relive to the top management.
Disadvantages:
- It may create conflict.
- Cause delay in decision making.
- There may be a loss of opportunity due to delays in decisions.
- The tendency of shifting.
- Lack of secrecy.
- Probability of diversion from the subject matter.
Matrix Organizational Structure
Matrix organization is the specific type of organizational structure that is formed specially to solve complex, unique, and new problems. It is generally formed to complete various types of unique and new projects on time and within a given budget.
Matrix organization is useful for organizations seeking to complete projects as required. It combines functional managers and project managers. Project managers take control of the direction and integration of activities and functional managers to ensure effective planning and give quality staff to complete projects in a desired period of time.
Here, every subordinate has to work under both functional and project managers. It does not follow specific principles such as scalar chain, and chain of command as so it is the most participative, humanly, and collaborative in nature.
Advantages:
- Participative in management.
- Better coordination and control.
- Adjustable to changing environment.
- Excellence in the inter-disciplinary specialization.
- Establishment of a teamwork culture.
- Completion of complex tasks.
- Optimum utilization of resources.
Disadvantages:
- This structure violates the principle of unity of command.
- The structure is costly.
- Difficulty in balancing.
- Feeling of insecurity.
- Lack of commitment.
- There may be over-specialization.
- Role conflict may arise among subordinates.
In conclusion, among all these types of organizational structures, one thing in common, they are all designed to achieve organizational goals as best as possible. They may differ in some aspects but the ultimate goal is the same. Hence, you should choose to consider their positive and negative impacts on your organization.