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Organizational structure is “the formal system of task and reporting relationships that controls, coordinates, and motivates employees so that they cooperate to achieve an organization's goals” (University of Lamar lecture notes, n.d.). The way the structure is designed affects the way people behave in the organization hence the aim of all organizational structures is to allow people and groups to cooperate and work together effectively to meet the company’s objectives.
This structure is determined by its environment, technology and strategy. It could either be Mechanistic (centralized control and authority, vertical communication, clearly defined tasks) which is characterized by rigidity and inflexibility or Organic (decentralized authority, loosely defined tasks with greater individual authority and horizontal communications) characterized by flexibility and adaptability which is preferable. According to Bishop (2005), “what managers need, are not recipes for complete structural change, but insights into the properties of fostering structures that can be adapted into the existing structure.”
The different types of structures are:
Functional, which groups people together based on their position performing similar tasks. The advantages of this include easy communication due to shared specialization, better performance evaluation within the team, and quicker decision making as they are all on the same perspective. The main disadvantage is that coordination between different departments becomes more difficult.
Divisional, which is based on product, market or geography has the advantage of functions being able to focus on a specific good, service or customer. This promotes high quality produc ...