Us Company Structures
In organizations form typically follows function. Every structure is intended for a specific purpose and not all structures are suitable for all organizations. Three primary organizational forms are typically utilized by most companies.
Functional Structure ― Departments composed of specialists working together.
Product / Programme Structure ― Teams with specific focus are composed of personnel with multiple specialities.
Matrix Structure ― Departments report to both Functional and Product / Project managements.
Functional Organization Example
CHIEF EXECUTIVE OFFICER (CEO)
PRESIDENT or DIRECTOR
Vice Pres.
Marketing
Vice Pres.
Develop.
Vice Pres.
Finance
Vice Pres.
Production
Other
Officers
Advantages Specialist competence high Specialists have peer support Specialists do not have coordination responsibilities Stable and predictable |
Disadvantages Conflicts arise between departments Important decisions moved upward Few share total overview of operations Large amount of inertia to change New projects difficult to initiate |
Product / Project Organization Example
CHIEF
EXECUTIVE OFFICER (CEO)
PRESIDENT or DIRECTOR
Product
Group A
Product
Group B
Project X
Development
Advantages Promotes teamwork Focuses efforts on one result Minimal conflict with other groups Team members add new skills Interfaces to customers and suppliers very clear |
Disadvantages Innovation limited to narrow sectors In depth competence of specialist may degrade Talented specialists may resist joining Harder to share large company functions (i.e. computer systems, purchasing, etc.) Priority conflicts within product line or projects |
Matrix Organization Example
CHIEF EXECUTIVE OFFICER (CEO)
PRESIDENT or DIRECTOR
Vice Pres.
Marketing
Vice Pres.
Engineering
Vice Pres.
Finance
Vice Pres.
Production
Other
Officers
Product
Group A
TEAM A
Product
Group B
TEAM B
Project X
Develop.
TEAM X
Advantages Supports rapid changes Enables both specialists and product / programme focus Department sizes can change quickly Multiple career opportunities
|
Disadvantages Conflicts over priorities inevitable More expensive and time consuming Demands high interpersonal skills Requires dual loyalties (two bosses) Difficult to create
|
Organizational structures for entrepreneurial companies (focusing on opportunities) tend to exhibit a tendency toward flatter, more informal character than for companies which are more oriented toward maximizing efficiency of current activities. Administrative organizations tend to have multi-level, hierarchical structures.