An organization is a group of people, a company, or some other entity. The group has a specific purpose. Its members may belong to different types of organizations. These types may be hierarchical, flat, or network. This article explores some of these structures. If you’re wondering what an organization is, consider these definitions.
Hierarchical structure
When implementing a hierarchy, it is important to understand the negative effects. For one, it can lead to a competitive and unfair environment. People who are in the position of authority over others will feel resentment, rivalry, and conflict. Furthermore, this type of structure discourages ideas and creative thinking.
Another negative impact of a hierarchical structure is that it slows down transformations, which are vital for survival in a rapidly changing environment. Hierarchies work well in industries where processes are standardized, but they aren’t effective in dynamic environments. They are also slow to react to new opportunities, which often require transformative change.
Hierarchical structures often create rigid bureaucracy, which slows the organization’s response time to changes. However, these types of organizations aren’t right for every business. Fortunately, there are alternatives. If you’re interested in maximizing your company’s efficiency, consider adopting a flat organizational structure.
Having a flat organizational structure can improve communication. In a hierarchy, communication between managers is slower. Because of the many layers, it is difficult to get the point across. A flat organization, on the other hand, allows for direct communication and fosters community. This can improve communication and productivity throughout the organization.
While flat structures are typically better for start-ups and smaller companies, they can be retained by larger companies. Flat organizations often allow more employee decision-making. Additionally, there are fewer managers. Consequently, flat organizations are leaner and more flexible. If you’re considering adopting a flat organization, you’ll want to carefully consider the benefits and drawbacks.
Flat organizational structures remove horizontal and vertical layers of management and promote horizontal career paths. They place a heavy emphasis on teamwork and customer service.
Flatarchy
Flatarchy as an organizational structure has many advantages. First of all, it provides a more agile environment for generating new ideas and solutions. Secondly, it allows for teams to work remotely to produce innovative products and services. And thirdly, flatarchies help organizations learn quickly and change quickly, which is key for resilience and agility. For those reasons alone, it may be worth exploring flatarchy as an organizational structure.
Flathierarchies are not without their challenges. In general, employees tend to become generalists, diluted by the lack of clear lines of responsibility. This can cause problems with work-life balance, and it makes people feel like they are responsible for everything. Flat organizational structures are also less likely to provide opportunities for promotion. People may be limited to horizontal moves, but these horizontal moves allow them to develop new skills.
Flatarchy is often associated with small, start-ups. This structure allows employees from different levels to participate in decisions. A good example of a flatarchy organization is an innovation center. Employees within the innovation center can pitch ideas, which encourages innovation and creativity. This style of organization can work for organizations of any size.
While flatarchies are generally less formal than traditional hierarchies, they often have more open lines of communication and collaboration. While some flat organizations do not have middle managers, there is still some form of hierarchy, but no job titles, seniority, or executives. For instance, video game developer Valve, which is responsible for classics like Half-Life, is a good example of a flat organization. Another example is the multinational manufacturing company WL Gore & Associates.
Flat organizational structures reduce turnover and improve employee morale. They also tend to be more effective in improving employee engagement, as employees can have more autonomy.
Network structure
The network structure of an organization can have its advantages and disadvantages. Supporters of this type of structure argue that it is more flexible and agile than other types of organizational structure. Because it is less rigid and hierarchical, communication is more open, which allows for greater innovation and growth. Its other benefits include decentralization, lower tiers of control, and a bottom-up flow of ideas and information.
One company that has embraced the network structure is H&M, a Swedish multinational clothing company. The company uses a network structure to target the needs of different segments and customers. To achieve this, the company outsources its production and processing functions to different countries. H&M maintains relationships with around 800 suppliers in Asia and Europe. In addition to these departments, H&M employs research and development heads, inventory managers, and marketing executives.
A network-based organization allows a company to grow without the need to build new facilities or modify existing facilities. A clothing company that wanted to increase its jewelry production could do so by outsourcing the manufacturing process to an existing jewelry manufacturing company. This type of structure also reduces the costs associated with operating a department.
Another form of network-based organization is the virtual network structure. This kind of structure involves the creation of small teams with diverse competencies that work together to produce a product or service. This model also focuses on building alliances between companies. Each associate of a network has a core competency that enables it to complete a portion of the tasks needed to deliver the product or service.
While the term “network” is often used incorrectly, it refers to a set of nodes connected by links. This means that any type of organizational structure can be a network. Networks generally exhibit two salient characteristics: clustering and path length. The first characteristic refers to the extent to which nodes are closely knit, while the second refers to the average number of links connecting nodes.
Divisional structure
The divisional structure in an organization is an ideal way to split responsibilities into smaller areas. Often, this structure is employed by large corporations, such as airlines and hotels. The main advantage of this organizational structure is that it allows a company to adapt to the needs of different groups of customers. However, the drawbacks of this structure are that it can also encourage poor communication and discourage interaction between different departments.
The major disadvantage of a divisional structure is that it creates problems that may be costly. For example, duplication of work can arise, and there is little communication between the different parts of the organization. Another problem that can arise is interdivisional rivalry and bad feelings. In addition, a divisional structure can also be expensive, as it can lead to lost economies of scale and increased costs for raw materials.
The key to making a divisional organization work well is to make sure that the top leaders understand the needs of each division and give them the guidance and resources they need. This can be done by sharing a central pool of resources among the divisions. This can also reduce costs and complexity of the organization.
The advantages of divisional structures include the ability to track individual divisions, which makes it easier to assign responsibility. In addition, divisional structures allow a firm to see which departments are profitable and which ones are not. The firm can then allocate investments towards the most profitable divisions. In contrast, a functional structure does not allow this type of accountability.
Generally, divisional structures work best for larger organizations, as each unit is autonomous, but they also can work for smaller businesses. In addition, a divisional structure allows for management development and accountability. It also fosters flexibility and initiative.
Functional structure
A functional structure of organization divides people into specialized teams, each with a specific skill set. In this manner, employees are more productive, and high-performance employees typically receive promotions. However, the lack of communication between the different groups can inhibit cooperation and can lead to unhealthy competition. Therefore, a functional structure may not be the best choice for a company that needs to respond to rapid changes.
A functional structure of organization focuses people on a specific area of expertise, such as sales, production, human resources, or marketing. Managers in these departments report to the company’s top management. Different departments, or functional units, may be stratified into different geographic areas, or they may even occupy different areas of the same office building.
A functional organization may also be a good fit for large organizations, especially those that deal with a heavy workload. The main disadvantage of a functional structure is that it takes longer to complete projects, and information from one department to another is often delayed. In addition, a functional structure does not consider horizontal communication between departments. For example, a staff member of functional unit A must coordinate with the manager of functional unit C to ensure that the manager has all the relevant information for the project. This requires an extra layer of communication, which can slow the process.
A functional structure is also a good choice for businesses that produce standardized goods in large quantities for a low price. The main benefit of a functional structure is that it promotes specialization and helps employees improve their skills. In a matrix structure, the staff of each division is involved in its goals and has access to the necessary resources to fulfill its mission.
