Types of Structure

Types of Organisational Structure

Functional Structure

Functional structure refers to a type of structure where the organisation is divided into several functional areas, such as marketing, production, human resources, etc.
Each functional area focuses on achieving its own objectives but also contributes to overall organisational goals.
Functional structure improves efficiency by grouping similar job roles and promoting homogeneity of expertise.
However, it may also create silos between departments, potentially limiting communication and cooperation.

Divisional Structure

Divisional structure organises its teams based on products, geographical markets, or customer segments.
This structure facilitates a broader understanding and management of different markets or product lines, allowing for increased specialisation and accountability.
On the downside, divisional structure can create duplication of tasks across different divisions and hinder standardisation.

Matrix Structure

In a matrix structure, employees report to multiple bosses; for instance, a project manager for a specific project and a functional manager for their area of specialisation.
Matrix structure offers more flexibility and adaptability as it enables collaboration between different functional areas.
However, it can create confusion and conflict due to the dual reporting lines, requiring effective coordination and communication.

Flat Structure

Flat structures have fewer hierarchical levels, promoting direct communication and empowers employees by reducing the layers of command.
This model is popular with small businesses and start-ups, where agility, innovation, and quick decision-making are essential.
The downside is that as companies grow, maintaining a flat structure can prove challenging as it may lack clear paths for employee advancement and may over-burden managers.

Hierarchical Structure

Hierarchical structures, often depicted in pyramid shapes, have many hierarchical levels, with a clear chain of command from top to bottom.
These structures provide clear career progression paths and accountability lines, optimising control.
Still, they can hinder communication flow, particularly upwards, and could foster an overly bureaucratic environment with a slower decision-making process.

Each structure has its own advantages and limitations; hence organisations need to choose wisely considering their objectives, size, culture, and the nature of work.