The structure is the foundation of your business: its hierarchy, roles and rules. Organizational design is a methodology that identifies the dysfunctional aspects of your systems and workflows and remodels them to fit current business realities.
Organizational structure describes the rules, roles and responsibilities within an organization, things we more commonly describe as the organization's hierarchy. As such, the organizational structure determines
Advantages
A divisional structure works well for companies that have a large product offering and for those that work in many geographies.
The failure of one division does not impact the operations of the other divisions, which gives the business flexibility.
Disadvantages
The business must duplicate many core functions across multiple divisions, which can be inefficient.
This organizational structure can be complicated from a tax and accounting perspective.
Pros and Cons of the Flatarchy
The flatarchy or team structure is a modern invention that aims to address the failings of the functional model. As the name suggests, it flattens the hierarchy and puts individuals with complementary skills into smaller working teams. Those teams are given a lot of autonomy and can choose how they work toward the company goals.
Advantages
Fewer (if any) management layers are cost-efficient and promote faster decision-making.
The lines of communication remain open and clear throughout the organization.
Disadvantages
Management could easily lose control and may find it hard to establish a base level of responsibility and accountability for the work and the organization as a whole.
With no boss to report to, employees can become confused about their roles.
Pros and Cons of the Matrix Structure
Companies that adopt a matrix structure group employees by both product and function, or by region and product, or by region and function and product. The matrix can be as big and as complicated as the company wishes. This means that each employee would have a number of different departments, divisions and managers. For example, an employee may have duties in both customer service and sales.
Advantages
Matrix structures are more dynamic than functional structures because staff can share information widely across task and departmental boundaries.
Matrix structures ensure that individuals with specialist knowledge are assigned to the project with the greatest need.
Disadvantages
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Understanding Organizational Structures - SHRMhttps://www.shrm.org › toolkits › pages › understandin...
Five elements create an organizational structure: job design, departmentation, delegation, span of control and chain of command. These elements comprise an ...
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