Mitra Ferdows, Business Management graduate from the United States’ Loyola Marymount University and consultant in start-ups, expresses her point of view on organizational structures main categories.
Organizational structures are in essence paradigms that divulge how companies are managed and how information is disseminated and flown between the different levels of hierarchy within the setting. It is basically a chart or layout that depicts the logistical organization of a company, the manner in which the roles, power, authority, and primary collective responsibilities are assigned, and governed. Mitra Ferdows stated that this designed structure depends substantially on its objectives and the strategy it develops in executing those goals. What is more, an organizational chart-the visual delineation of this vertical structure- needs to be taken into account in advance of building up the infrastructure of an organization. Taking utmost care while creating the organizational structure, which clearly determines the reporting relationships and the authority flow to support good communication resulting in efficacious work process flow, is unquestionably crucial for any organization.
What are two main organizational structures?
Mitra Ferdows added that organizational structures, on both theoretical and practical grounds have yet been classified based on the size of the organization, nature of the business, the objectives and business strategy to achieve them, and the organization environment. Typically organizational structures are divided into two main classifications in the world of business grounded on the chain of command, span of control and centralization in terms of making decisions for the organization. These two are called mechanistic and organic structures.
Mechanistic Vs. Organic Organizational Structure
These structures span on a spectrum, with mechanistic which represent the conventional, top-down approach at one side and organic structure with a more collaborative flexible approach at the other.
Mechanistic Organizational Structures
Recognized for having narrow spans of control along with high centralization, specialization, and formalization, mechanistic structures also known as bureaucratic structures are quite obdurate in what specific departments are tailored and authorized to undertake for the company. Mitra Ferdows added that indeed this model is more formal in a way that hold staff accountable for their work while on the other hand, creativity, resourcefulness and agility the organization needs to keep up with random changes in the market will be stifled. Despite this, there are distinct advantages to this model like the chain of commands, meaning that as a business grows, it needs to make sure every individual and team has been informed of what is expected of them. The hierarchy would then work to business advantage sustaining the growth with more people and projects to trace and eventually requiring instances of policymaking. In other words, mechanistic structures are better to remain at hand for the time of need.
Organic Organizational Structures
Mitra Ferdows continued that organic structures also known as flat structures, on the other side of the spectrum, are known for their wide spans of control, low specialization, decentralization, and loose departmentalization. This model bases on taking on projects based on their importance and what the team is capable of rather than what is expected of them or they are designed to do. This considerably formal structure which takes a bit of an ad hoc approach to business needs can sometimes make the chain of commands whether long or short difficult to decipher. Organic structure, however, to a business that is navigating a fast-moving industry, with empowering employees to try new things and develop as professionals, in the long run will make the organization’s workforce more powerful.
What are the best organizational structures?
According to Mitra Ferdows, arguing on the obvious advantages to any of the mentioned structures would be vain as finding the most appropriate model for a business depends on a number of factors like the industry that company fits into, the overall size of the company along with the company goals whether in terms of finances or services it would provide the customers with. Broadly speaking, taking flexibility into consideration, start-ups would benefit more from organic structures and conventional organizations with their roots in the ground would still need more precisions to stick to one structure over the other.
More Specific types of Organizational Structure
Mitra Ferdows further pointed out that with most of the structures falling on the more traditional side of the spectrum (mechanistic), there are more specific types of these so called models namely functional, product-based, market-based, geographical divisional, process-based, matrix, circular, flat, and network. These are simply archetypes as in practice hybrid structures are implemented by organizations to adopt elements from multiple structure types.
An organization that is well structured achieves effective coordination, as the structure delineates formal communication channels, and describes how separate actions of individuals are linked together.
Organizational structure defines the manner in which the roles, power, authority, and responsibilities are assigned and governed, and depicts how information flows between the different levels of hierarchy in an organization.
The structure an organization designs depends greatly on its objectives and the strategy it adopts in achieving those objectives.
An organizational chart is the visual representation of this vertical structure. It is therefore very important for an organization to take utmost care while creating the organizational structure. The structure should clearly determine the reporting relationships and the flow of authority as this will support good communication – resulting in efficient and effective work process flow Mitra Ferdows concluded.