Types of Organizational Structures
Introduction
You’ve got a business and you want it to be successful. What you might not realize though is that the structure of your company can impact its success even more than any other factor. The right organizational structure will help you achieve goals, but so can bad choices. That’s why it’s important to understand how different organizational structures work and which one might work best for your business.
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| 8 Best Organizational Structures to Consider for Business |
The Functional Structure
The most typical kind of organisational structure is the functional structure. It's also the most centralized and uses a single leader to manage all aspects of an organization, including its finances, operations, customers and products or services.
The functional structure has advantages over other types of organizations: it operates like one big machine with few employees and no layers that need to be managed separately; it can operate in any industry; it has fewer overhead costs because there’s only one person who needs to be paid for each task instead of multiple employees doing similar tasks across different departments, but this may come at a cost if you don't have enough people on your team who know how everything works together so they can do their job well without being micromanaged by someone else in charge.
The Divisional Structure
The divisional structure is a type of organizational structure in which the company is divided into smaller parts called divisions. This type of centralization is useful because it allows for better control and monitoring, but it also means that your employees will have more autonomy to act on their initiative.
This type of corporate structure can be used in a variety of industries, including manufacturing or retail businesses. It's especially common among companies that sell goods from multiple locations across the country or world (such as Amazon).
The Matrix Structure
The matrix structure is a combination of the functional structure and the divisional structure. It’s an ideal option for companies that want to be able to operate in multiple areas, but still, maintain control over their operations.
For example, if you own a department store and have several different departments (like clothing or furniture), it may make sense for your organization to use this kind of organizational structure because it allows everyone within the company (including yourself) to work more efficiently by having access to all areas of expertise at once without having to travel around town visiting each location regularly yourself.
The Geographic Structure
A geographic structure is a decentralized structure. It is one in which the power is distributed throughout the organization and not concentrated in one location.
For example, if you have 10 employees in New York City and another 20 employees who work from home or er city, this would be an example of a geographic structure because it allows for more flexibility with where people can work from.
The advantage of this type of organizational setup is that it allows for flexible options when it comes to travel costs or other expenses related to working remotely as well as having access to more skilled workers outside your company’s walls (i.e., freelancers).
The disadvantage of using this type of organizational model would be that if something were to happen at one location then all branches must respond quickly without any delay because they could become vulnerable if there was no communication between them.
The Team Structure
Team structures are a great way to organize your business and make it run more efficiently. Teams are self-directed, cross-functional and cross-cultural. They also can span multiple locations around the world, which means they can be effective regardless of where you're located or what language you speak.
Teams are also very flexible when it comes to skill sets—you might have one person who specializes in marketing but another one who works as an accountant, or perhaps there's someone who doesn't know much about sales but does know how to build websites from scratch (like me).
The Network Structure
The network structure is decentralized. It is based on the concept of networks, which means that all employees have direct access to one another and can communicate with each other freely. This type of organization works best for small businesses with fewer than 10 employees or as part of an overall company strategy where there are no single points of failure or central control over resources.
The advantages of this format include:
Flexibility - You can easily change roles if needed without having to hire new people.
Flexible Working Hours - Everyone has tasks they're responsible for and responsibilities they need to be fulfilled, so no one gets stuck doing something they don't enjoy doing anymore.
The Flat Arch Or Horizontal Structure
The futarchy is an organizational structure where the power and decision-making authority is distributed throughout the organization. This can be achieved through a system of self-organization, in which individuals within the company take on tasks they are best suited for and delegate to others who may not have those skills.
It's best suited for small, fast-moving businesses with low overhead costs so they can focus on growing quickly instead of spending time managing employees or administration tasks
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The Franchise Or Modular Structure
A franchise structure is a decentralized structure. Each franchisee has the same or similar products, services and marketing as other franchisees in your network. The business you're creating for yourself under this type of organizational structure is known as a single-source company (SSC).
The SSC can be an excellent way to run your business because it allows you to take advantage of economies of scale without having to worry about competition between divisions within your company's portfolio. This also makes for easy integration when it comes time for expansion or acquisition by another entity within that same network, it's just another piece on which they can draw.
Choosing The Right Organizational Structure For Your Business Is Important.
The best way to determine what kind of structure is right for you is by researching other companies in similar industries and finding out what works for them. You should also consider whether or not there are any specific cultural factors at play when choosing an organizational model.
For example, if one person has been working on a project for months but hasn't been paid yet (and another person just started), it would be helpful if there were clear lines between which roles had responsibility for paying bills versus those who take care of other tasks within daily operations such as scheduling meetings or responding to emails from clients/customers requesting information about certain products or services provided by others within our organization."
Conclusion
As you can see from the above, there are several different types of organizational structures that can be used to run your business. Each has its advantages and disadvantages, but in general, it’s best to choose one that best suits your needs and goals.