An organizational structure is a system that outlines how certain activities are directed to
achieve the goals of an organization. These activities can include rules, roles, and
responsibilities. The organizational structure also determines how information flows between
levels within the company. Organizations depend on people, process, and resources to thrive.
The larger the organization, the more synchronized each link in the chain will be to ensure
success. The characteristics of the company will affect which structure would work best for
the organization. One of the characteristics is the company size. For large companies there are
a lot of people who are doing the same task within an organized system which means this
company would do better in a centralized structure. Another characteristic would be the
company mission which focuses on what the company does. The last one is the company
culture, and it concentrates on how well the employees do, and the company determines that by
observing them and meeting with them on a regular basis
There are 9 types of organizational structure; first one is the Functional Organizational
Structure, we can find the functional structure in companies like legal firms. It categorizes the
company into departments and this structure depends on the performance of the employees
and breaks them upon that. The second type of organizational structure is the Product-Based
Divisional Structure, and this structure consists of smaller structures, so each division has its
own department like marketing department and selling department so each division within the
organization is dedicated to a particular product line. Another type would be the Market-Based
Divisional Structure and this structure is for organizations that have products and services.
These products and services are created for especially market segments and it would be
effective if these organizations had knowledge of those segments.
Another type of organizational structure is the Geographical Divisional Structure, the
structure is based on geographical layout and it is best for organizations that need to be near its
resources or markets. Next would be the Matrix Structure. It is the least type of structure to be
used and it focuses on the flow of information from upper level to the lower level. The manager
takes all the decisions and gives directions and orders to the team. In this structure the
employee might take orders from multiple managers to whom he reports. “The Process-Based
Structure is based on the end-to-end flow of different processes, such as “Research &
Development,” “Customer Acquisition,” and “Order Fulfillment”.” While the Circular Structure