4 Common Types of Organizational Structures
Businesses need structure in order to survive. There are different kinds of organizational structures you can pursue. Organizational structures can be tall, in the sense that there are a number of tiers between entry-level employees and the owner of the company. Organizational structures can also be fairly flat, in the sense that there are only a couple of levels separating the bottom and the top. Here are a few of the most common structures in modern businesses:
1. Functional-Also commonly called a bureaucratic organizational structure, the functional structure divides the company based on specialty. This is your traditional business with a sales department, marketing department, customer service department, etc.
2. Divisional-The divisional structure refers to companies that structure leadership according to different products or projects. Each operates as an individual company, but they are all ultimately underneath the parent brand.
3. Matrix-Under this structure, employees have multiple bosses and reporting lines. While matrix structures come with a lot of flexibility and balanced decision-making, this model is also prone to confusion and complications when employees are asked to fulfill conflicting responsibilities.
4. Flatarchy-While large businesses have traditionally followed tall structure, it's becoming increasingly common to see flatarchies in smaller businesses and new startups. The flatarchy structure essentially removes unnecessary levels and spreads power across multiple positions. This leads to better decision-making, but can also be confusing and cumbersome when everyone doesn't agree.
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