5 Types of Organizational Structures

Were you ever curious what kind of organizational structure you have in your company? When companies get larger, they create more layers in hierarchy, for growth and development. People get more specialized in their skills in comparison to flat organizational structures, where one person can have different skill sets and responsibilities. However, we must define what kind of model your company has, and that is determined by your company's size, philosophy and function. Sometimes, your company actually combines a few of these together. It depends what will work in your group.

Functional
Organizations that group positions by similar roles follow a functional structure. The structure follows a hierarchical model that includes clearly identified roles, authority and promotional pathways. Employees in each department fill duties not covered elsewhere in the company, minimizing an overlap of tasks. You may divide work units by expertise, resources, skills and activities. For instance, your organization may include production, finance, human resources and marketing groupings.

Divisional
The divisional structure is defined by the grouping of departments and is particular to larger companies. The divisional structure follows a functional model within each division. Specialized departments help managers keep track of the products and activities the company develops. Your departments might distinguish between customer service, production and geographic location. Managers can focus resources and outcomes on their specific departments. The structure helps managers monitor performance more easily than some other models.

Matrix
The matrix structure combines the specialization provided by a functional structure and the focus provided by a divisional structure.Your employees would be part of teams that connect functional roles with divisional roles. Each employee belongs to at least two formal groups; one is a functional group, and the other is a project, product or program team. Your employees also report to two bosses -- a functional group boss and a team boss. The structure increases your employee motivation and allows training across functional areas.

Team
Team structures organize each function into an objective-based group. Members from each of your departments work together to solve problems and find opportunities. Your employees might be involved with product development teams or a diversity task force. The team structure can help remove barriers between departments and foster effective problem-solving relationships. It can also motivate employees and increase decision-making times.

Network
In a network structure, your organization would rely on other organizations to perform important roles. For instance, you may employee an accountant, website administrator or security personnel on a contractual basis. You reduce the overhead cost of your company's operations because you don't need to hire as many staff members. 

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