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Types of OS

The document outlines ten types of organizational structures, including hierarchical, functional, and matrix structures, each with their respective pros and cons. It explains how these structures define roles, responsibilities, and communication within organizations. The information is aimed at helping organizations choose the best structure for their needs.

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mymomits
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13 views10 pages

Types of OS

The document outlines ten types of organizational structures, including hierarchical, functional, and matrix structures, each with their respective pros and cons. It explains how these structures define roles, responsibilities, and communication within organizations. The information is aimed at helping organizations choose the best structure for their needs.

Uploaded by

mymomits
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Types of OS

10 types of
organizational
structures (+ org
charts for
implementation)
What is an organizational structure?

An organizational structure outlines how responsibilities and roles are


assigned and grouped throughout an organization.

At some point, you have likely seen an organizational chart


for your company. And we can probably guess what it looked
like.

The typical org chart looks like a pyramid, your C-level


executives at the top with lines stretching down to middle
management and finally staff-level employees.

But not every company functions best with a hierarchical


organizational structure. Many types of organizational charts
exist because many types of organizational structures exist.
In this post, we go through the 10 common types of org
structures and reasons why you might consider each of them.

1. Hierarchical org 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 lower-level employees), and each
employee has a supervisor.

Pros

 Better defines levels of authority and responsibility

 Shows who each person reports to or who to talk to about


specific projects

 Motivates employees with clear career paths and chances


for promotion

 Gives each employee a specialty

Cons

 Can slow down innovation or important changes due to


increased bureaucracy

 Can cause employees to act in the interest of their


department instead of the company as a whole

 Can make lower-level employees feel like they have less


ownership and can’t express their ideas for the company
2. Functional org 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.

Pros

 Allows employees to focus on their role

 Encourages specialization

 Help teams and departments feel self-determined

 Is easily scalable in any sized company

Cons

 Can create silos within an organization

 Hampers interdepartmental communication

 Obscures processes and strategies for different markets or


products in a company

3. Horizontal or flat org structure


A horizontal or flat organizational structure fits companies
with few levels between upper management and staff-level
employees. Many startup 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.

Pros

 Gives employees more responsibility

 Fosters more open communication

 Improves coordination and speed of implementing new


ideas

Cons

 Can create confusion since employees do not have a clear


supervisor to report to

 Can produce employees with more generalized skills and


knowledge

 Can be difficult to maintain once the company grows


beyond startup status

4. Divisional org 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.

Depending on your organization’s focus, there are a few


variations to consider.
Market-based divisional org structure

Divisions are separated by market, industry, or customer


type. A large consumer goods company, like Target, 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.

Pros

 Helps large companies stay flexible

 Allows for a quicker response to industry changes or


customer needs

 Promotes independence, autonomy, and a customized


approach

Cons

 Can easily lead to duplicate resources

 Can mean muddled or insufficient communication


between the headquarters and its divisions

 Can result in a company competing with itself


5. Matrix org 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.

Pros

 Allows supervisors to easily choose individuals by the


needs of a project

 Gives a more dynamic view of the organization

 Encourages employees to use their skills in various


capacities aside from their original roles

Cons

 Presents a conflict between department managers and


project managers

 Can change more frequently than other organizational


chart types

6. Team-based org structure


It’ll come as no surprise that a team-based organizational
structure groups employees according to teams think Scrum
teams or tiger teams. A team organizational structure is
meant to disrupt the traditional hierarchy, focusing more on
problem-solving, cooperation, and giving employees more
control.

Pros

 Increases productivity, performance, and transparency by


breaking down silo mentality
 Promotes a growth mindset
 Changes the traditional career models by getting people
to move laterally
 Values experience rather than seniority
 Requires minimal management
 Fits well with agile companies with Scrum or tiger teams

Cons

 Goes against many companies’ natural inclination of a


purely hierarchical structure
 Might make promotional paths less clear for employees

7. Network org 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.

Pros
 Visualizes the complex web of onsite and offsite
relationships in companies
 Allows companies to be more flexible and agile
 Give more power to all employees to collaborate, take
initiative, and make decisions
 Helps employees and stakeholders understand workflows
and processes

Cons

 Can quickly become overly complex when dealing with


lots of offsite processes
 Can make it more difficult for employees to know who has
final say.

8. Process-based structure
A process-based structure organizes employees into groups
or departments based on steps of a process. The leader of
the company is listed at the top, as they oversee all
processes. Each step of the process has a supervisor and
employees who do work in that process. The chart reads from
left to right. One process cannot begin until the process
before it is completed.

Pros

 Can lead to faster and more efficient processes


 Promotes teamwork within departments and across
departments
Cons

 Can lead to barriers between departments


 Can lead to miscommunication between departments

9. Circular structure
A circular organizational structure puts leaders of the
organization at the center rather than the top so they can
share information outward rather than pass it down a chain of
command. Employees in different departments are also seen
as part of a larger whole rather than siloes off by department.

Pros

 Promotes the flow of information across the organization


 Promotes communication and collaboration between
employees and departments

Cons

 Can cause confusion around who to report to, especially


for new employees
 Can take longer to make decisions

10. Line structure


A line structure is one of the simplest organizational
structures as authority flows from top to bottom. Each
department is ran by a manager and works toward a common
organizational goal.
Pros

 Reporting structure is clear


 Stable environment

Cons

 Can be inflexible
 Can limit innovation and specialization
 Can lead to managers having a lot of power

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