The document discusses different types of organizational structures used by companies: functional, divisional, matrix, and hierarchical. The functional structure divides a company into departments based on roles like finance, marketing, etc. Divisional structures separate a company into divisions based on products, customers, or regions. Matrix structures combine functional and divisional reporting with cross-functional teams. Hierarchical structures rely on a vertical chain of command with multiple levels of authority and specialization. Each structure has benefits like focus and flexibility, but can also have drawbacks such as silos and communication issues if not implemented properly.

2. FUNCTIONAL STRUCTURE

3. The functional structure
is based on an
organization being
divided up into smaller
groups with specific
tasks or roles.

5. So all the accountants are
placed in the finance
department and so on for the
marketing, operations, senior
management and human
resources departments.

6. Each department has a
manager or director who
answers to an executive a
level up in the hierarchy
who may oversee multiple
departments.

7. PROS
• Allows employees to focus on
their role
• Encourages specialization
• Help teams and departments
feel self-determined
• Is easily scalable in any sized
company

8. CONS
• Can create silos within an
organization
• Hampers interdepartmental
communication
• Obscures processes and
strategies for different markets
or product

9. DIVISIONAL STRUCTURE
In a divisional structure, your
company groups workers into
teams based on the products or
projects that meet the needs of a
certain type of customer.

10. Under this structure, each
division essentially operates as
its own company, controlling its
own resources and how much
money it spends on certain
projects or aspects of the
division.

11. Larger companies that
operate across several
horizontal objectives
sometimes use a divisional
organizational structure.

12. Pros
• Helps large companies stay flexible
• Allows for a quicker response to
industry changes or customer needs
• Promotes independence, autonomy,
and a customized approach

13. Cons
• Can easily lead to duplicate
resources
• Can mean muddled or insufficient
communication between the
headquarters and its divisions
• Can result in a company
competing with itself

14. Divisions are separated by market,
industry, or customer type. A large
consumer goods company, like Target
or Walmart, might separate its
durable goods (clothing, electronics,
furniture, etc.) from its food or
logistics divisions.
MARKET-BASED DIVISIONAL ORG STRUCTURE

16. Divisions are separated by product line. For
example, a tech company might have a
division dedicated to its cloud offerings,
while the rest of the divisions focus on the
different software offerings––e.g., Adobe
and its creative suite of Illustrator,
Photoshop, InDesign, etc.
PRODUCT-BASED DIVISIONAL ORG STRUCTURE

17. Divisions are separated by region,
territories, or districts, offering more
effective localization and logistics.
Companies might establish satellite
offices across the country or the globe
in order to stay close to their customers.
GEOGRAPHIC DIVISIONAL STRUCTURE

19. A matrix organizational
chart looks like a grid, and it
shows cross-functional
teams that form for special
projects.
MATRIX ORG STRUCTURE

20. The matrix organizational
structure is a combination of
two or more types of
organizational structures. The
matrix organization is the
structure uniting these other
organizational structures to give
them balance

21. Usually, there are two chains of
command, where project team
members have two bosses or
managers.

22. For example, a project or task
team established to develop a
new product might include
engineers and design specialists
as well as those with marketing,
financial, personnel and
production skills.

23. Pros
• Allows supervisors to easily choose
individuals by the needs of a
project
• Gives a more dynamic view of the
organization
• Encourages employees to use their
skills in various capacities aside
from their original roles

24. Cons
• Presents a conflict between
department managers and project
managers
• Can change more frequently than
other organizational chart types

26. HIERARCHICAL ORGANIZATIONAL STRUCTURE
Organizations that use a traditional
hierarchical structure rely on a
vertical chain of command as the
prime method of organizing
employees and their
responsibilities.

27. The basic hierarchy structure
looks like a pyramid: each level
is in charge of the levels below
and reports to the levels above.
Organizations with many layers
describe a tall hierarchy while
those with only a few follow the
flat model.

29. Pros
• It creates a defined structure for
communication.
• It offers multiple layers of authority within
the company.
• It establishes a clear picture of authority.
• It allows for specialization.
• It eliminates issues of indecisiveness.

30. Cons
• It may cause a lack of collaboration.
• It can cause managers to become territorial.
• It may reduce internal innovation.
• It centralizes the power structure.
• It creates a lot of bureaucracy that must be
managed.
• It may create communication barriers.
• It creates a structure of unequal treatment.