What is the relationship between organizational structure and organization charts?
Your business's functions are the things it does – production, sales, marketing, research and billing, for example. The organizational structure defines the relationship and interactions between the parts of your business, and identifies how the chain of command runs through the different levels. Show
TipThe relationship between organizational functions and structure is like a flow chart. You can set up your business structure around your organizational functions, but even if you don't, function and structure will influence each other. Functional Structure Separates DepartmentsMost businesses adopt a functional organizational structure with a chain of command. In other words, different functions go into separate departments that report to department managers, who then report to someone higher up. If you adopt a functional structure, it has the advantage of clear lines of authority, with key decision-makers in each department who set the overall mission and tasks. The structure allows each employee to concentrate on her particular mission. A functional structure for an organization is not without its drawbacks, however. You can end up with departments that don't talk to each other or cooperate well. A customer may get bounced from department to department if his problem doesn't relate to one particular function. Divisional Structure Has Many BranchesA divisional organizational structure spreads functions across different branches: If you have different product lines, the division for each product line has its own functional groups such as marketing, R&D, sales and accounting. The advantage of this approach is that each division of the company has the personnel to carry out all necessary functions. In essence, each division can carry out its business operations more or less autonomously. The drawback is that with employees in each division performing identical functions, you could end up with a lot of redundancy and inefficiency. For instance, managing five human resource operations, rather than a single, centralized operation, means duplication of functions, managements systems, policy development and so on. Matrix Structure Provides FlexibilityUsing a matrix structure in your business can give you greater flexibility in business functions than a more hierarchical organization. In a matrix structure, each employee works in a function-based department, such as marketing or finance, but they can be assigned to projects under different managers and teamed with employees who have different functions. This structure adapts organizational function to changing organizational needs. The drawback is that the chain of command in a matrix may become cloudy and conflicted. Visualize With Organizational ChartsIf you or your staff have trouble visualizing a proposed structure, you can use an organizational chart to see it clearly. The New York and Erie Railroad developed the first organizational charts in the 19th century as a way to improve management efficiency. A chart shows the lines of authority and control running between different departments and levels of management. A well-designed chart will make it easy to see who makes decisions, who reports to whom and how your organization divides up its operating functions. 7 types of organizational structures (+ org charts for implementation)Reading time: about 7 min Posted by: Shannon Williams
At some point, you have likely seen an organizational chart for your company. And we can probably guess what it looked like. The typical org chart looks like a pyramid, your C-level executives at the top with lines stretching down to middle management and finally staff-level employees. But not every company functions best with a hierarchical organizational structure. Many types of organizational charts exist because many types of organizational structures exist. Let’s go through the seven common types of org structures and reasons why you might consider each of them. 1. Hierarchical org structureHierarchical org chart example (click on image to modify online)The pyramid-shaped organizational chart we referred to earlier is known as a hierarchical org chart. It’s the most common type of organizational structure—the chain of command goes from the top (e.g., the CEO or manager) down (e.g., entry-level and low-level employees), and each employee has a supervisor. Pros
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2. Functional org structureFunctional org chart example (click on image to modify online)Similar to a hierarchical organizational structure, a functional org structure starts with positions with the highest levels of responsibility at the top and goes down from there. Primarily, though, employees are organized according to their specific skills and their corresponding function in the company. Each separate department is managed independently. Pros
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3. Horizontal or flat org structureHorizontal or flat org chart example (click on image to modify online)A horizontal or flat organizational structure fits companies with few levels between upper management and staff-level employees. Many start-up businesses use a horizontal org structure before they grow large enough to build out different departments, but some organizations maintain this structure since it encourages less supervision and more involvement from all employees. Pros
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4. Divisional org structureIn divisional organizational structures, a company’s divisions have control over their own resources, essentially operating like their own company within the larger organization. Each division can have its own marketing team, sales team, IT team, etc. This structure works well for large companies as it empowers the various divisions to make decisions without everyone having to report to just a few executives. Depending on your organization’s focus, there are a few variations to consider. Market-based divisional org structureDivisions are separated by market, industry, or customer type. A large consumer goods company, like Target or Walmart, might separate its durable goods (clothing, electronics, furniture, etc.) from its food or logistics divisions. Product-based divisional org chart example (click on image to modify online)Product-based divisional org structureDivisions are separated by product line. For example, a tech company might have a division dedicated to its cloud offerings, while the rest of the divisions focus on the different software offerings—e.g., Adobe and its creative suite of Illustrator, Photoshop, InDesign, etc. Geographical divisional org chart example (Click on image to modify online)Geographic divisional org structureDivisions are separated by region, territories, or districts, offering more effective localization and logistics. Companies might establish satellite offices across the country or the globe in order to stay close to their customers. Matrix org chart example (click on image to modify online)
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5. Matrix org structureA matrix organizational chart looks like a grid, and it shows cross-functional teams that form for special projects. For example, an engineer may regularly belong to the engineering department (led by an engineering director) but work on a temporary project (led by a project manager). The matrix org chart accounts for both of these roles and reporting relationships. Pros
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6. Team-based org structureTeam-based org chart example (click on image to modify online)It’ll come as no surprise that a team-based organizational structure groups employees according to (what else?) teams—think Scrum teams or tiger teams. A team organizational structure is meant to disrupt the traditional hierarchy, focusing more on problem-solving, cooperation, and giving employees more control. Pros
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See why forming tiger teams is a smart move for your organization. Learn more 7. Network org structureNetwork org structure example (click on image to modify online)These days, few businesses have all their services under one roof, and juggling the multitudes of vendors, subcontractors, freelancers, offsite locations, and satellite offices can get confusing. A network organizational structure makes sense of the spread of resources. It can also describe an internal structure that focuses more on open communication and relationships rather than hierarchy. Pros
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Consider the needs of your organization, including the company culture that you want to develop, and choose one of these organizational structures. Once you've chosen the right org structure to pursue, learn the steps in the company reorganization process. Read more What is the relationship between organizational structure and organization charts quizlet?What is the relationship between organizational structure and organization charts? An organization chart clarifies organizational structure. - Organizational structure is the specification of the jobs to be done within an organization.
Is organizational structure the same as organizational chart?An organizational structure and an org chart can often appear similar on the surface, but there are some profound distinctions: Organizational structure is designed around the functions a business performs (e.g., sales, marketing, finance, engineering, etc.). An org chart is built around people and titles.
What is the relationship between organizational design and structure?The organizational design comprises the implementation of organizational structure and the schemes necessary to attain the organization's goals. The organizational structure represents the formal line of power and authority encompassing the roles and responsibilities that employees are assigned.
What is organizational structure and chart?An organizational chart is a diagram that visually conveys a company's internal structure by detailing the roles, responsibilities, and relationships between individuals within an entity. It is one way to visualize a bureaucracy.
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