Organisational Structures

Jamie Z 2024-03-13

Learning Goals

• Be able to design and complete organisational charts
• Explain the different types of organisational structures and their advantages and disadvantages

Organisational Structures

System that outlines how certain activities are directed in order to achieve the goals of an organisation. These can include rules, roles and responsibilities.

Organisational Chart

• An organisational chart is a diagram that visually conveys a company's internal structure by detailing the roles, responsibilities, and relationships between individuals within an entity.

Functional/Hierarchical

• Most traditional approach
• Employees are grouped together based on their area of specialty
• Managers lead each area and report up to a director

Advantages

• Provides those with similar abilities to easily communicate and work on projects together
• Managers can easily supervise employees
• Clear responsibility in roles

Disadvantages

• Teams focus on their area of expertise only
• Lack of flexibility
• Depend on employee creativity
• Can be unaware of what is happening in other areas of business

Flat

• Personnel organised in a horizontal manner with less management positions (they control a large group)
• Encourages employee autonomy, creativity and collaboration

Advantages

• Better, more open communication between employees and management
• Increased flexibility
• Adapt to change quickly

Disadvantages

• Larger workload for management
• Confusion about roles and responsibility

Divisional

• People are grouped together based on the product or service they provide, not on the work they do
• Eg. A larger corporation has multiple divisions for design, marking, etc

Advantages

• Every team specialises in an area and knowledge levels are high
• Communication within teams is easy

Disadvantages

• Communication can be difficult across teams and between similar job roles
• Promotion and change can be difficult across the organisation

Matrix

• Facilitates the horizontal flow of skills and information
• It is mainly used in the management of large projects or product development processes
• Draw employees from different disciplines to an assignment without removing them from their respective positions
• May involve employees reporting to different bosses

Advantages

• Flexible - can be set up or dissolved as needed
• The best teams can be established to tackle the biggest challenges

Disadvantages

• Employee may find confusing to report to multiple bosses
• Communication and job roles can be complicated