Every business organization adapts the structure most suitable for them. The advantage and disadvantage of a company depend upon the kind of business, the strategies and the end users. There are mainly four major types of organizational structures. They are Functional Organizational Structure, Divisional Organizational Structure, Matrix organizational Structure and Horizontally linked Organizational Structure. Some large organizations use many of these structures in combinations. It is common for a sales team to use the functional organizational structure and R & D to use the Matrix Organizational Structure. It is also true that business organizations change these structures occasionally when there is a change in business goals.
Functional Organizational Structure
In this type of organizational structure making decisions is done by the top level management team. The functional organizational structure is stable and efficient the top management have complete control over the junior management team. One of the disadvantages of this type of organizational structure is poor communication. There will be frustration when customers have to work with different departments due to poor communication between the departments.
Divisional Organizational Structure
In this kind of organizational structure the division based on geographic locations. If an organization is having business in different regions then such type of organizational structure can help in developing multiple teams. One of the disadvantages of such structure is the competition arising between the regions which might become an impediment when two or more regions have to work together.
Matrix Organizational Structure
In such organizational structures, employees build teams themselves and these teams organize things. People can be included and excluded from the team whenever a necessary and such structure is best suitable for small organizations. As there will not be any clear reporting pattern there might arise confusion when decisions are made. When moving from people between roles setting priorities can become difficult.
Horizontally Linked Organizational Structure
In some industries, the employees are grouped into three different functional areas where planning building and running are done. The planning department will be more focused on Research and Development and Financial Feasibility pattern. The building department will be responsible for the construction of a framework for the projects as well as the assembling of data received from various projects. The running department usually includes sales and marketing operations. This kind of organizational structure might not be suitable for products having a life span and service-related industries.