A REPORT ON

ORAGNIZATIONAL STRUCTURE
OB-2

(TEAM – 03)

SUBMITTED TO: SUBMITTED BY:

DR. ALPANA AGARWAL DIWAKAR PANDEY (GM18090)
GIRIRAJ (GM18092)
JAYA MISHRA (GM18
GAURAV CHATURVEDI (GM18091)

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 Introduction
An organizational structure is a system that outlines how certain activities are directed in order to
achieve the goals of an organization. These activities can include rules, roles and responsibilities.
The organizational structure also determines how information flows from level to level within
the company. For example, in a centralized structure, decisions flow from the top down, while in
a decentralized structure, the decisions are made at various levels.

Why Have an Organizational Structure?

Not having a formal structure in place may prove difficult for certain organizations. For instance,
employees may have difficulty knowing to whom they should report. That can lead to
uncertainty as to who is responsible for what in the organization. Having a structure in place can
help improve efficiency and provide clarity for everyone at every level. That also means that
each and every department can be more productive, as they are likely to be more focused on
energy and time.

Centralized vs. Decentralized Organizational Structures

At its highest level, an organizational structure is either centralized or decentralized.
Traditionally, organizations have been structured with centralized leadership and a defined chain
of command. The military, for example, is an organization famous for its highly centralized
structure, with a long and specific hierarchy of superiors and subordinates. However, there has
been a rise in decentralized organizations, as is the case with many technology startups. This
allows the companies to remain fast, agile and adaptable, with almost every employee receiving
a high level of personal agency.

TYPES OF ORGANIZATIONAL STRUCTURE

4 common types of organizational structures

There are many different kinds of organizational structures found in companies.

Organizational structures can be tall, in the sense that there are a number of tiers between entry-
level employees and the leaders of the company. Organizational structures can also be fairly flat,
in the sense that there are only a couple of levels separating the bottom from the top. Depending
on your goals, pay structure, and division of work, you may relate more to one structure than
another.

While you don’t necessarily have to use an organizational structure that currently exists, it helps
to be aware of what other companies are using. Here are a few of the most common structures in
modern businesses:

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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.

The advantage of a functional structure is that individuals are dedicated to a single function.
These clearly defined roles and expectations limit confusion. The downside is that it’s
challenging to facilitate strong communication between different departments.

2. Divisional
The divisional structure refers to companies that structure leadership according to different
products or projects. Gap Inc. is a perfect example of this. While Gap is the company, there are
three different retailers underneath the heading: Gap, Old Navy, and banana republic. Each
operates as an individual company, but they are all ultimately underneath the Gap Inc. brand.

3. Matrix
The matrix structure is a bit more confusing, but pulls advantages from a couple of different
formats. Under this structure, employees have multiple bosses and reporting lines. Not only do
they report to a divisional manager, but they also typically have project managers for specific
projects.

4. Project
This organizational structure are temporarily formed for specific projects for a specific period of
time, for the project of achieving the goal of developing new product, the specialists from
different functional departments such as production, engineering, quality control, marketing
research etc., will be drawn to work together. These specialists go back to their respective duties
as soon as the project is completed.

Really, the project organization is set-up with the object of overcoming the major weakness of
the functional organization, such as absence of unity of command, delay in decision-making, and
lack of coordination.

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EXAMPLE OF COMPANY WHO FOLLOW THE
ORGANIZATIONAL STRUCTURE:-
Google's Organizational Structure
Google is well known for its cross-functional, or team-based, organizational structure. The
traditional corporate structure is to have employees at the bottom, supervisors above them,
middle managers above supervisors and top management above all. This is the vertical approach
to management. Decisions are made at the top and orders are sent down to the employees at the
bottom. The cross-functional organizational structure used by Google is more of a team approach
to management. By allowing all employees to be a part of decision-making, Google maintains a
small-company feel and promotes the notion that all employees play an equally important part in
Google’s success. This type of structure places more importance on intelligence and ideas than
on titles.

Google's Reorganized Structure

In 2015, Google's CEO, Larry Page, announced a major reconfiguration of Google's
organizational structure. The company formed a conglomerate called Alphabet, a new holding
company composed of independent operating units, including Google. The Google search engine
and related businesses, including Android, Gmail, and YouTube, to name a few, would be just
one of these units. Alphabet would also be home to nine other companies.
In 2017, another shift was announced. Google was changed from a corporation to an LLC or
limited liability corporation, which Alphabet believes better suits an affiliate company owned by
a parent. In addition, Alphabet created a holding company called XXVI Holdings, Inc. that acts
as an umbrella over Alphabet and all its businesses.

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FUNCTIONAL STRUCTURE OF GOOGLE

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EXAMPLE OF MATRIX ORGANIZATIONAL STRUCTURE
STARBUCKS:

Starbucks is one of the largest coffee shop chains in the world and one of the main reasons for its

success is its wonderful organization structure. It is a company organization structure which

determines is management, leadership, communication and ofcourse success and Starbucks is a

good example of how divisions and responsibilities must be separated and placed within a

company.

The company has a matrix organizational structure which is a mix of several features which are

functional organization, geographic divisions, teams and product based divisions. To understand

this structure or hierarchy of Starbucks better, you can go through the following given

information.

Functional structure

This structure of Starbucks organization or hierarchy is a structure which indicates to a grouping

based on the business function. According to this structure, the CEO is placed at the top followed

by different departments performing different tasks. Some of the main departments in the

company are the HR department, the finance department, the marketing department and others.

Geographic divisions

The organizational structure of the company also includes the geographic divisions. At the

moment, the company has three main geographic divisions for the global market and they are

China and Asia Pacific, Americas and Europe, Middle East, Russia and Africa. Each of the

geographic divisions in the company has a Vice President and this means that the managers

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report to two of their superiors who are the geographic head and the functional head. This very

feature makes way for closer managerial support for geographic needs.

Teams

There are various teams used in different parts of Starbucks coffee’s organization structure. This

is the lowest level of hierarchy in Starbucks since most teams work at lower levels. Every firm

has teams which are organized to serve the purpose of delivering goods as well as services to the

customers. This structural arrangement ensures that the company is always capable to provide

effective and efficient service to its clients and customers. The company keeps changing its

structures to suit their needs and that of the consumers.

Functional hierarchy

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Geographic divisions

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SAMSUNG ORGANIZATIONAL STRUCTURE
Samsung organizational structure is divisional and the company is divided into three key
divisions: IT & Mobile Communications (IM), Consumer Electronics (CE), and Device
Solutions (DS). The rationale behind the choice of divisional organizational structure relates to
Samsung’s large product portfolio and differences between products and services the company
offers to the market.
Accordingly, Samsung’s each division is managed separately taking into account the
characteristics of their products that have implications on new product development, marketing,
selling and other aspects of the business. Moreover, Samsung Electronics has more than 200
subsidiaries around the world.
Figure below illustrates Samsung organizational structure:

As it is illustrated in figure above, apart from three divisions, Samsung organizational structure
also integrates corporate management office and Samsung Advanced Institute of Technology
(SAIT). Corporate management office deals with overall management of the group and also has

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administrative responsibilities. SAIT is Samsung Group’s R&D hub, established as the incubator
for the development of new products and services.

The senior management completed its review of optimal organizational structure on April 2017
and decided not to convert to a holding company structure. Following a series of recent scandals
involving Samsung management that culminated in Jay Y. Lee, the former de facto head of
the Samsung conglomerate being jailed for 5 years, it can be argued that Samsung organizational
structure will change in the foreseeable future. Specifically, Samsung organizational structure
may change to make governance and decision making practices more transparent to eliminate or
at least to reduce the cases of future scandals.

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References
 https://www.investopedia.com/terms/o/organizational-structure.asp
 https://online.pointpark.edu/business/types-of-organizational-structures/
 https://bizfluent.com/about-6692920-google-s-organizational-structure.html
 https://www.hierarchystructure.com/starbucks-company-hierarchy/
 https://research-methodology.net/samsung-organizational-structure-divisional-according-
product-types/


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