Business & Enterprise

COMMON MODELS OF ORGANIZATIONAL STRUCTURE

AND THEIR ADVANTAGES & DISADVANTAGES
Common forms of organization include line structure, line-and-staff structure, multidivisional
structure and matrix structure.
1. Line structure
The simplest organizational structure, in which direct lines of authority extend from the top
manager to the lowest level of the organization
Convenience Store

Owner Manager Assistant Manager Hourly Employee

a. Advantages:
- Simplicity
- Directness
- Fixed responsibility
- Unity of command
- Flexibility
- Economical
- Storage discipline
- Direct communication
- Coordination
- Development of executives
- Quick decision
b. Disadvantages:
- Overloading
- Lack of specialization
- Inadequate communition
- Lack of initiative
- Instability
- Scope for favouritism
2. Line-and-Staff Structure
A structure having a traditional line relationship between superiors and subordinates
and also specialized managers – called staff managers – who are available to assist line
managers
a. Advantages:
- Specialization
- Better discipline
- Balanced and prompt decisions
- Development of employees
- Lesser burden on Line officers
- Quick actions
- Opportunities for advancement
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b. Disadvantages:
- Conflict between Line and Staff Personnel
- Lack of Responsibility
- More Dependence on Staff
- Lack of Co-Ordination
- Confusion:  If the pattern of authority relationship between line and staff executives
is not clearly indicated, there may be considerable confusion throughout the
organisation
- Ineffective Staff
- Expensive
- Advice Ignored: As the staff officers lack authority to put their recommendations
into practice, their advice may be ignored by the line executives.

3. Multidivisional structure
A structure that organizes departmets into larger group called divisions
a. Advantages
- Increased Organizational Effectiveness
- Increased Control
- Profitable Growth
- Internal Labor Market
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b. Disadvantages
- Managing the Corporate - Divisional Relationship
- Coordination Problems between Divisions
- Transfer Pricing
- Bureaucratic Costs
- Communication Problems
4. Matrix structure

A structure that sets up teams from different departmens, thereby creating two or more
intersecting lines of authority; also called a project – management structure

a.

Advantages:
 Clear articulation of project objectives
 Workable way of integrating project objectives with functional objectives
 Efficient use of limited human resources
 Rapid (often interdisciplinary) information flow through the project
 Retention of expert teams through the life of the project
 Rapid dispersion of team members back into the functional organization upon project
completion without organizational disruption
b. Disadvantages:
 Increases organizational complexity
 Requirement for high degree of cooperation between functional and project
management
 Potential for conflicting management directives
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 Difficulty of establishing priorities suiting both functional and project management
 Possible slowdowns in management reaction to events when two structures required for
solution 
 Increase in management overhead costs 

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