Types of Organizational Structures

1. TYPES OF ORGANIZATIONAL STRUCTURES
SIMPLE STRUCTURE:
• The simple structure is a structure in which the owner – manager makes all
major decisions and monitors all activities while the staff serves as an
extension of the manager’s supervisory authority.
• The owner manager actively works in the business on a daily basis,
informal relationships, few rules, limited task specialization and
unsophisticated formation systems characterize the simple structure.
• The simple structure is matched with focus strategies and business level
strategies, as these firms commonly compete by offering a single product
line in a single geographic market.
• Simple, frequent and informal communication among employees - makes it
easy to coordinate the work that is to be done.

2. LINE ORGANIZATION:
•The line organization represents the structure in a direct vertical
relationship through which authority flows.
•It is the simplest form of organization structure and is also known as
scalar or military organization.
•The authority flows from top to bottom throughout the organization.
Example: small businesses in which the top manager, often the owner, is
positioned at the top of the organizational structure and has clear "lines"
of distinction between him and his subordinates.

3. LINE AND STAFF ORGANIZATION STRUCTURE:
• In line and staff organization the line authority remains the same as it is
in the line organization.
• Authority flows from top to bottom. Staff are attached as experts on
important matters.
•A widely accepted perspective of line and staff functions is that line
functions are those which directly influence the accomplishment of
organizational objectives.
•Staff functions are those which facilitate the work of the line personnel
towards the achievement of organizational objectives.

4. FUNCTIONAL ORGANIZATIONAL STRUCTURE:
• The functional organization consists of a chief executive officer and a
limited corporate staff, with functional line managers in dominant
organizational areas such as production, accounting, marketing, R&D,
engineering and human resources.
•The structure allows for functional specialization, thereby facilitating
active sharing of knowledge within each functional area.

5. MULTI – DIVISIONAL STRUCTURE:
•With continuing growth and success firms often consider greater levels
of diversification.
•However, successful diversification requires analysis of substantially
greater amounts of data and information when the firm offers the same
products in different markets or offers different products in several
markets.
•In addition, trying to manage high levels of diversification through
functional structures creates serious coordination and control problems.

6. SBU STRUCTURE:
•A single Chief executive cannot control a number of decentralized units
of a broadly diversified company.
•The business can be effectively controlled, if the related businesses are
grouped into strategic units and the effective and senior executive is
delegated with the authority and responsibility for its management.
•A strategic business unit is a grouping of business subsidiaries based on
some important strategic elements common to each.

7. MATRIX ORGANIZATION STRUCTURE:
• A matrix organisation, also referred to as the “multiple command
system” has two chains of command.
•One chain of command is functional in which the flow of authority is
vertical.
•The second chain is horizontal depicted by a project team, which is led
by the project, or group manager who is an expert in his team’s assigned
area of specialisation.
•Since the matrix structure integrates the efforts of functional and project
authority, the vertical and horizontal lines of authority are combination of
the authority flows both down and across.

8. NETWORK ORGANIZATION STRUCTURE OR VIRTUAL
ORGANIZATIONS:
•The increasing volatility of the environment, coupled with the
emergence of knowledge based industries, has led to the creation of a
network structure.
• This structure is composed of a series of project groups or
collaborations linked by constantly changing non – hierarchical cobweb
like networks.
• In a this structure, managers coordinate and control relationships that
are both internal and external to the firm.

9. THANK YOU