Organizational structure is a concept in the area of business administration and management. deals with the how the company is organized around the division of activities and resources in order to fulfill the company's objectives.
Organizational structure is often exemplified with a chart identifying the hierarchy and division into departments.
But organizational structures go beyond this, and constitute a very useful administrative instrument for the managers as a way to see where the efforts are going and if they all converge according to the planning of the company.
there are two types of organizational structures:
formal organizational structure
THE formal organizational structure it is represented by the organizational chart and strictly follows the hierarchical and departmental relationships as foreseen. For example: a document created by the maintenance department needs to be validated by the department of projects, approved by the management, be appreciated by the executive secretary and then signed by the board. If one of these elements fails to do so, or changes, the process stops or rolls back.
One of the most traditional and oldest types of organizational structure comes from this model, which is the linear organizational structure. It's the one that follows the hierarchy, from the highest line of command to those who just carry out orders. The clearest example is the army and its lines of command.
Formal organizational structures are further divided into:
- Functional - the structure is set up by the function of each department. Example: Marketing Department, Finance Department, etc.
- Territorial - by regions, in the case of geographically dispersed companies. Example: South Region, North Region.
- Customers - by audiences. Example: Children and Men.
- Law Suit - Some industries that are divided between Assembly, Painting, Finishing, and so on.
- Projects - Mainly construction companies, which have temporary projects and professionals who work by project, and not continuously in the same function.
- Matriarchal - when there are, hierarchically, two departments coordinating the work of one.
- mixed - when two or more types of structures are mixed to suit the reality of the company and/or the market.
informal organizational structure
THE informal organizational structure it does not define the relationship between the areas of the company, assuming a more natural action among employees.
Following the same example of the formal organizational structure, the maintenance department could directly send the document for the board, but maybe it would be more efficient to do this for the project team, without going through the management or the Secretary. There is more agility in some steps, but in compensation in case of errors or rework it can hinder the progress of procedures.