Organizational structure: what it is, types, characteristics and components

Organizational structures are the systems that define companies through a frame of reference, indicating what their structure is, how the communication between their parts and the allocation of resources, among other aspects.

Then let’s see what are the organizational models or structuresseeing their main characteristics, the elements that compose them and what types there are.

    What is the organizational structure?

    An organizational structure or organizational model is the system that defines a business through its frame of reference, including lines of authority, communications, tasks, and resource allocation. This structure determines the orientation of activities towards the achievement of business objectives, the assignment of tasks, the coordination of stakeholders and the supervision of employees.

    A business can be structured in different ways depending on the objectives to be achieved. The structure of an organization will determine how the business will run and operate. With the organizational model, it explicitly assigns the responsibilities and functions that its parts must perform, in addition to clarifying what are the processes for the organizational machinery to work properly.

    Organizational structure is also critical because it determines which individuals can participate in decision-making and to what extent their opinions and views will shape the actions of the business. As every organization is different and aspires to a variety of goals, the ideal organizational model will greatly depend on the nature of the business, its context, needs, aspirations and adversity.

    The organizational structure often needs to be reviewed by business leaders as the context and resources may change, so it is necessary to ensure that the proposed model continues to help the business achieve its strategic goals and mission. Also ensure processes meet industry-specific standardsin addition to meeting labor, safety, health and worker welfare requirements.

      Characteristics of organizational structures

      In order to work more effectively, organizations need a formal system of decision making, communication and task accomplishment that is according to the needs of the company itself.

      We can highlight the following general features of organizational structures.

      1. Well-defined structure

      As its name suggests, we are talking about a structure, a model which as such must be well defined. Any organizational structure it must have an established framework in which the hierarchy is defined. The structure should clearly define what each job is within the company, indicating its function, scope and general direction.

      To avoid confusion, the structure should be well documented and easily accessible to all workers, detailing what each does. Confusion about tasks and roles, or some workers spending time on tasks that are beyond their reach, should be avoided as much as possible.

        2. Communications

        Of course, in every business, there must be good communication between the parties. A good organizational structure will make it very clear what the communication hierarchy is, indicating how workers communicate with each other depending on the situation. The organizational model describes how tasks are delegated and communicated to employees, how employees keep management informed of their tasks, and how and by what means they can submit complaints or suggestions.

          3. Clear vision

          Organizations need to have a vision, something that helps them set goals and objectives to achieve. This vision must be clear and concrete when developing the organizational structure. With her the values ​​defended in the organization are clearly defined, what must be achieved and what are its moral and ethical limits. In turn, the vision should be concise, clearly guiding the direction the business is taking.

            4. Departmentalization

            Departmentalization refers to how a company brings together several areas of its organization. Organizational models can bring together different fragments of the organization based on various aspects, such as their function (sales, marketing, customer service), geolocation (regions, countries, cultural environments), by product, type of market, by customer ⁇

            5. Chain of Command

            The chain of command or hierarchy of authority means the company’s line of authority, indicating who reports to whom. It refers to the number of junior employees over which managers have authority.

            6. Centralization

            This function refers the degree of centralization or decentralization of the organizational structure. In decentralized ones, responsibilities are distributed in decision-making to lower level managers and, also, to some non-managerial employees, while in centralized ones, control and decision-making responsibilities remain close to the top of the hierarchy. . organization. .

            What makes an organization more centralized or more decentralized depends on several factors, including the hierarchical levels of the company itself or its degree of geographical dispersion.

              Elements and components

              According to Henry Mintzberg, a Canadian academic specializing in business and business management, it is possible to identify a number of general elements in organizational structures, which he explains in detail in his book “The Structuring of Organizations ” (1979). They are next.

              1. Strategic Summit

              At the top of the organization is the strategic top, whose main objective is ensure that the company fulfills its mission and manages its relationship with the environment. Top management, which could well be considered synonymous with the strategic top, defines long-term business strategies and policies that aim to achieve the set objectives.

              2. Midline

              Below the apex, one would find the midline. This is a group of middle managers responsible for convert broad strategic objectives and plans commissioned by the strategic summit into detailed plans, intended for implementation in the form of operational action plans.

              Action plans will be carried out by workers, specifying management responsibilities for particular tasks and how resources will be allocated. Middle managers are also responsible for overseeing activities and taking action to ensure that resources are used in the most effective way to achieve corporate goals.

                3. Technostructure

                The larger a business, the more complex it becomes, developing a distinct group of people who care about the best way to get the job done. These employees they specify exit criteria and ensure that staff have the appropriate skills. This group is known as the technostructure and is made up of key people and teams working in human resources, finance, training and planning.

                4. Support staff

                You can also find other people in the company administrative functions not directly related to the mission of the organization, such as public relations, cafeteria, consulting. This part of the organizational structure is known as the support staff.

                Within this support staff, we would also find people who perform functions such as research and development, public relations and legal services. Although its products and services do not contribute not directly to the central objectives of the organization, its activities improve the efficiency and effectiveness of the strategic apex, the middle line and the core business.

                5. Operating core

                The operational core is the bottom of the organization. It is employees who perform the basic work of producing products or providing services.

                  Types of works

                  We can talk about different types of organizational structure, the main ones being the following.

                  1. Simplified organization

                  Simple organizations have a flexible organizational structure, often led by leaders with an entrepreneurial and innovative spirit. This pattern is usually seen when a business has just taken its first steps and is still in its infancy, run by its owners who often work for their own workforce. It has a simple and flat structure, consisting of one or a few managers. The organization is informal and unstructured.

                  Its members have ideals, energy and enthusiasm, factors that motivate them to achieve their goals and maintain their vision for the future. However, it has drawbacks such as the limited structure itself, poor work discipline (its workers are often amateurs), and little management control if work processes are not clearly defined.

                  As organizations grow, their managers have to make more and more decisions, which can overwhelm them. Therefore, they end up hiring more employees, which makes the business structure more sophisticated and complex.

                  2. Organization of machines

                  Organizing machinery or bureaucracy is especially common in government agencies and other large businesses. What most defines this type of organization is its high standardizationthe work being very formalized and the trades are clearly defined.

                  There are many procedures within the company and it often happens that decision-making is centralized, with functional departments to delegate certain tasks.

                  All functional lines reach to the top, allowing senior managers to retain centralized control. Properly assembled, these organizations can become very effective.

                  3. Professional organization

                  Professional organization is similar to bureaucratic organization, but It is characterized by a high degree of professional knowledge. Employees are technically trained to perform specialized skills on their own.

                  Thanks to this, decision-making is more decentralized than in bureaucratic organizations. This structure is common in places like universities, law firms, or banks.

                  Its main drawback is the lack of control senior managers can have over workers.because authority and power are distributed throughout the hierarchy.

                  4. Divisional organization

                  The divisional structure is common in large companies with multiple business units. These companies they divide their activities and products into divisions to favor the specific administration of each sector. The most common is centralized control, with division vice presidents overseeing all facets of work in each of their divisions.

                  The main advantage of the division structure is that it allows superiors to have more control over responsibilities than in the machine structure. However, one of its most significant weaknesses is the duplication of activities and resources. Additionally, divisions can come into conflict as each must compete for the limited resources allocated by the company’s management.

                  5. Adhocracy

                  Adhocracy is a very innovative type of organization. In new industries, companies must innovate and work ad hoc, developing solutions specifically adapted to their immediate context in order to survive.

                  The great advantage of adhocracies is that maintain a talent pool, from which people can be drawn at any time to solve problems and work more flexibly. Employees often move from one team to another as projects are completed and new ones emerge. As a result, adhocracies can respond quickly to change by bringing together experts capable of meeting new challenges.

                  But this leads to problems such as conflict, especially when power and authority are unclear. Additionally, having to deal with sudden changes can be psychologically and physically exhausting for workers, who are stressed by the uncertainty of not having a well-established routine. This makes it difficult to retain talent.

                  Bibliographic references

                  • Jacobides., MG (2007). The inherent limits of the organizational structure and the dissatisfied role of the hierarchy: the lessons of a quasi-war. Organizational Sciences, 18, 3, 455-477.
                  • Lim, M. (2017). Literature review on organizational structure and success. College mirror, 43, 1, 16-18.
                  • Mitzberg, H. (1979). The Structuring of Organizations: A Research Synthesis, Prentice-Hall.
                  • Pugh, DS, ed. (1990). Organization Theory: Selected Readings. Harmondsworth: Penguin.

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