ORGANISATIONAL STRUCTURE-
Purpose-
Organizational structures are important because they help businesses implement efficient decision-making
processes. By assigning specialized roles to lower-level employees, businesses can make better decisions
faster.
Organizational structure (OS) is the systematic arrangement of human resources in an organization so as to
achieve common business objectives. It outlines the roles and responsibilities of every member of the
organization so that work and information flow seamlessly, ensuring the smooth functioning of an
organization.
• An organizational structure is the arrangement of an organization’s workforce according to job
responsibility and ranking.
• It ensures the proper functioning of an organization by establishing its chain of command and
workflow.
• The key elements of an organizational structure are work design, departmentalization, delegation,
hierarchy, and management ratio.
• The different types of organizational structure are hierarchical, flat, flatarchy, functional, divisional,
and matrix.
• Organizational structure enables quick decision-making and better coordination and communication
among employees resulting in enhanced productivity.
Types of Organisation and their Structure
• Line Organisation-Line organization approaches the vertical flow of the relationship. In line
organization, authority flows from the top to the bottom. It is also known as the chain of command or
scalar principle. In this article, we will talk about a line organization.
Advantages-
• Simple to work
• Economical and effective. It also allows quick decisions and efficient coordination.
• Conforms to the scalar principle of organization. Further, it promotes the unity of command.
• In a line organization, the responsibility for the performance of tasks is fixed upon definite
individuals. Therefore, there is accountability of delegated tasks.
• There is excellent discipline in a line organization due to unified control and undivided loyalties.
• The overall cost of running the organization is low due to the non-involvement of staff personnel.
• It is a stable form of organization.
Disadvantages-
• It is a stable form of organization.
• These organizations can overburden a keyman or a few key-men to the extent of their breaking
point.
• Such organizations usually suffer from a lack of expert advice.
• A line organization is usually rigid and inflexible.
• Functional Organisation-In a functional structure, organizations are divided into specialized
groups with specific roles and duties. A functional structure is also known as a bureaucratic organizational
structure and is commonly found in small to medium-sized businesses.
Advantages-
• Employees grouped by skill
• Greater sense of teamwork
Disadvantages-
• Lack of communication with other departments
• harmful competition
• Management issues
• Divisional Organisation- In a divisional structure, various teams work alongside each other
toward a single, common goal. Each of these divisions has an executive who manages how that branch
operates, controls its budgets and allocates its resources.
Advantages-
• Focus on a single good and service
• More centralized leadership
Disadvantages-
• Poor integration with other divisions
• Competition between divisions
• Lack of communication between divisions
• Potential tax implications
• Matrix Organisation-In the matrix style of organizational structure, employees are divided
into teams that report to two managers—a project or product manager along with a functional manager. In
essence, a matrix structure is a combination of various organizational structures.
Advantages-
• Flexible workplace environment
• Fosters open dialogue
Disadvantages-
• Leadership confusion
• Conflicting leadership loyalties
• Potentially more costly
• Roles may not be clearly defined
• Potentially heavy employee workload
