This document discusses different types of organizational structures and their key characteristics. It outlines seven main organizational structures: flat/horizontal, holacratic, flatarchies, flatter, divisional, matrix, and traditional hierarchy. Each structure is defined, with examples provided of how decision making and communication flow. Factors that influence which structure an organization chooses include size, technology/processes, environmental uncertainty, growth speed, and culture.

1. Organizational
Structure:
By Andriy Tatchyn
Types, benefits and
disadvantages

2. Organizational Structure -
An organizational structure is a system that outlines how certain activities
are directed in order to keep an organization efficiency and achieve the
Strategic Goals of the organization. These activities can include processes,
roles, responsibilities, decision making and communication.
For example, in a centralized structure, decisions flow from the top down,
while in a decentralized structure, decision-making power is distributed
among various levels of the organization. Having an organizational
structure in place allows companies to remain efficient and focused.
Definition

3. “Organization is not a goal, an
organization is a mechanism of
achieving your strategy”

4. Strategy and Structure of the organization are very interconnected as Strategy defines an
objective for an organization, while Structure is implemented to achieve the objective.
There are four basic factors that can determine organizational structure and strategy.
1. Organizational size
2. The technology/processes used by the organization
3. Environmental uncertainty
4. The Speed of grows
5. Culture
Organizations of small size and a need for fast reaction to an environment change should
implement more Organic than Mechanistic structure.
Main factors

5. 7 Basic organizational structures

6. Flat/Horizontal Organization
Usually represented by absence of one or multiple
middle management layers that usually stay
between your employees and the C-level
executives or founders. It also implies that teams
are self-managed, meaning that the
responsibilities of a traditional middle manager
(Head of the department) is held by the entire
organizational unit or one of C-level executives
who compabine the role. A flat or horizontal
organization is very common for small companies.
On a flat organization roles are mixed and
combined a lot.

7. Holacratic Organization
The basic goal with this structure is to allow for
distributed decision making while giving everyone
the opportunity to work on what they do best.
There is still some form of structure and hierarchy
but it's not based on people as much as it based on
circles or what most people would think of as
departments. Each department has its own goal.
Information is openly accessible and issues are
processed within the organization during special
and ongoing meetings.
The org structure is not well tested yet, on a bigger
scale, from what we know Zappos is the largest
organization in the world attempting to implement
this and there are around 1,500 people.

8. Flatarchies
A combination of Hierarchical and Flat
Structure, where the organization mainly has a
Hierarchical structure but uses Flat structure in
some Units to achieve faster decision making,
innovation or comfort. In our specific case
implementing this idea in a Delivery Office
level can be a very interesting solution. Keep
growing by being small.

9. Flatter Organization
Taking into account that hierarchical organization in
many parameters become outdated, many big and
mid-size companies try to experiment with Flatter
Organization Structure. Flatter organization has a
fewer layer and communication can go both ways
top-down and button-up.
It's important to point out that this type of model
cannot exist without a few crucial things. The first is
a robust set of technologies that act as the central
nervous system of the company. These technologies
help make sure that employees can collaborate and
access each other and information anywhere,
anytime, and on any device. And this nowadays
should not be attribute of a flatter organization only.

10. Divisional Structure
When a company grows bigger, you can add
a division as a layer to split business on
smaller parts. A stand alone division can be
responsible for industry, product, client or
particular location like Europe, Asia or
North-America. Each division contains the
necessary resources and functions needed
to support its’ main business needs.

11. Matrix
In a Matrix organizational structure, the
reporting relationships are set up as a grid, or
matrix, rather than in the traditional
hierarchy. From my experience, it works
better when a line manager is responsible for
the business part of the Job, while the
functional manager is responsible for
staffing, education, best practices and
knowledge sharing. For example, each
UI/UX designer can have a Project Manager
on a specific project, while UI/UX team lead
defines a strategy and vision for competency
development within
an organization.

12. The Traditional Hierarchy
The hierarchical model is the most popular organizational chart type. There are a
few models that are derived from this model, like Flatter, Flatarchies and Matrix.
In a hierarchical organization structure, employees are grouped with every
employee having one clear supervisor. The grouping is done based on a few
factors, hence many models derived from this. Below are a few of those factors:
• Supervisor - the person who manages the specific group of people.
• Function – employees are grouped according to the function they provide.
• Geography – employees are grouped based on their region. For example in
USA employees might be grouped according to the state. If it’s a global
company the grouping could be done according to countries.
• Product – If a company is producing multiple products or offering different
services it can be grouped according to product or service.
In our case they also can be grouped by office location.

13. Keep in touch
LaSoft is a software development and consulting
company, that helps businesses optimize processes
and operations using modern technological
solutions. Since 2014 we consulted and implement
25+ international projects in Real Estate,
Construction, Marketing, HR & Recruitment and
Telecommunication domains helping our clients to
achieve better results in their business.
Please drop us an email on info@lasoft.org
if you want our expert to have an intro call
with you.
lasoft.org