ORGANISATIONAL

STRUCTURE

TANAY SHUKLA
B.COM (HONS)
22BCA012
 PREFACE
• ORGANIZATIONAL STRUCTURE
• Basic Elements of Organizational Structure Design
• TYPES OF ORGANIZATIONALK STRUCTURE
 FUNCTIONAL STRUCTURE
 DIVISIONAL STRUCTURE
 MATRIX STRUCTURE
 TEAM STRUCTURE
 NETWORK STRUCTURE
 HIERARCHICAL STRUCTURE
 FLAT STRUCTURE
 ORGANIZATIONAL STRUCTURE

An organizational structure defines how activities such as task allocation,

coordination, and supervision are directed toward the achievement of
organizational aims.
Organizational structure is the backbone of all the
operating procedures and workflows at any
company. It determines the place
and the role of each employee in the
business, and is key to organizational development.
BASIC ELEMENTS OF ORGANIZATIONAL STRUCTURE DESIGN

An organizational structure is based on a range of elements,

including:
• Work specialization
• Departmentation
• Chain of command
• Span of control
• Centralization/Decentralization
• Formalization
 Work specialization
Work specializations define how responsibilities are split between
employees based on the job description. It’s used to split projects
into smaller work activities and assign digestible tasks to individual
employees. The most common results of improper specialization are
low efficiency and burnout.
 Departmentalization
Departmentalization is an act of grouping specialists on the
basis of the job description, skills, location, or other factors
that connect them.
 Chain of command

Chain of command represents a system for passing instructions and

reporting within an organization. Ideally, it distributes the power,
supports knowledge sharing, and encourages employee accountability.
 Span of control
Span of control (or span of management) is the number of
subordinates who report directly to a manager or leader. The more
employees assigned to a manager, the wider their span of control.
 Centralization and decentralization
Centralization and decentralization are the concepts defining how
managers, as well as employees, give input on company goals and
strategy. While centralization gives leaders the ultimate control over
decision-making processes, decentralization allows employees to
impact business decisions. We’ll dive into centralized and
decentralized organizational structures in the further section.
 Formalization
Formalization determines to which extent business processes,
policies, and job descriptions are standardized. It may regulate
communication between employees and managers, workplace
culture, operational procedures, etc.
Centralized vs. Decentralized
Organizational Structures
TYPES OF ORGANISATIONAL
STRUCTURE
1. Functional structure

A functional organizational structure is a common type of

business structure that organizes a company into different
departments based on areas of expertise, grouping employees by
specialty, skill or related roles.
Examples of organizations with a functional structure
include: Amazon, Starbucks.

Advantages
• Specialisation - departments focus on one area of work.
• Productivity - specialism means that staff are skilled in the tasks
they do.
• Accountability- there are clear lines of management.
• Clarity - employees understand their own and others' roles.

Disadvantages
• Hindered decision making
• Competition between departments
2. Divisional structure

A divisional structure organizes

employees around a common product or
geographical location. Divisional
organizations have teams focused on a
specific market or product line.
DIVISIONAL STRUCTURE

Advantages
•Understand individual markets better.
•Promotes flexibility.

Disadvantages
•It requires high operating and managing cost.
•Conflicts may arise among different divisions with
reference to allocation of funds at the cost of other
divisions.
3. Matrix structure

A matrix organizational structure is a

hybrid approach that combines
elements of both functional and
project-based structures. In this setup,
employees have two bosses: one from
their function (like marketing or
finance) and one from a specific
project they are working on.
4. Team structure

A team-based organizational structure creates small teams that focus on delivering

one product or service. These teams are capable of solving problems and making
decisions without bringing in third parties.
Examples of organizations with a team-based structure
include: Apple, Cisco, Google, Whatfix.

Advantages

•Drives growth and innovation.

•Promotes lateral career moves.

Disadvantages

•Provides experiences across departments and teams.

•Experience is valued over seniority.
•Less emphasis on management.
•Is more agile.
5. Network structure

A network structure is one in which more than one organisation combines to produce a
good or provide a survice.
Examples of organizations with a network structure include: H&M,
IBM

Advantages
•Clearer focus
•Lower cost
•Flexibility

Disadvantages
•Lack of reliability
•Lack of secrecy
•Sacrificing of profit
6. Hierarchical structure

A hierarchical structure is the chain

of command within a company that
begins with senior management and
executives and extends to general
employees.
Examples of organizations with a hierarchical structure include: Amazon, Sony

Advantages
•Clear career and promotion path
•Clearly defined autority.

Disadvantages
•Slow decision making
•Poor communication
7. Flat organization structure

In a flat organizational structure, there are few middle managers between

employees and top managers. The structure requires less supervision, increases
employee involvement, and boosts trust in the workplace.
Examples of organizations with a flat structure
include: Start-ups, most small businesses.
Advantages
• More responsibility for employees.
• Open communication.
• Fast decision making as the chain of command is shorter.

Disadvantages
• Risk of powar struggles arising in the absence of formal syatem.
• Difficult for large organisations.