A functional organizational structure groups individuals by their specific functions. All managers of different functional areas report to a director or vice president responsible for operational areas. While this structure separates functions by expertise, it can lead to silos focusing only on their area. A customer organizational structure organizes by customer type to ensure their expectations are met. In healthcare, outpatients and inpatients have different needs. A geographic organizational structure organizes by region to better support logistical demands and regional customer differences, with each region typically reporting to a central overseer. This is common for companies with customers across large areas.

1. Organizational
Structure
part2

2. 3. Functional
Organizational
Structure

3. Functional organizational
structures are the most
common. A structure of
this type groups
individuals by specific
functions performed.

4. For example, managers of
different functional areas
all report up to one
director or vice president
who has responsibility for
all of the operational areas

5. The advantage of this type of
structure is that functions are
separated by expertise but the
challenges comes in when
different functional areas turn
into silos that focus only on
their area of responsibility and
don’t support the function of
other departments.

6. 5. Customer
Organizational
Structure

7. Certain industries will
organize by customer type.
This is done in an effort to
ensure specific customer
expectations are met by a
customized service
approach

8. An example of this would be in
healthcare. A patient seen as an
outpatient has very different
needs than those of patients
who spend time in the hospital
as inpatients. A customer
centered structure creates
customized care for those
patients.

9. The advantage of this type of
structure is that it specializes
in the needs of each customer
group but can ignore the
needs of different customer
types.

10. 6. Geographic
Organizational
Structure

11. For organizations that cover a
span of geographic regions, it
sometimes makes sense to
organize by region. This is done
to better support logistical
demands and differences in
geographic customer needs.

12. Typically a structure
that is organized by
geographical regions
reports up to a
central oversight
person

13. You see this type of
structure in companies
that go beyond a city or
state limit and may have
customers all across the
country or in multiple
states.