Analysing the standard general organization structure

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Devise adequate analytical tools-but don't strangle in paper. Compare to: (1) history, (2) goals, (3) like organizations. Don't use availability of micro information to micromanage. Look for trends, failure nodes, areas for improvement. Orient to the product. Keep in clear focus for all.

4. Create leaders at many levels, not just a few.

Provide wide autonomy and flexibility to achieve goals while preserving overall coherence and overarching principles. Get the leaders where the action is. Streamline staff procedures. Staff supports the line, not vice versa.

5. Integrate authority and responsibility-not separate them. Know the difference.

Create a sense of responsibility throughout. Recognize that few accept responsibility without accompanying authority. Create ownership. Invest principal authority in horizontal mission/product leaders-not in vertical functional "czars". In "matrixing" establish clear lines of authority- tied to the product. Make it clear who is in charge. Link authority to accountability.

6. Set up internal competition and comparison where feasible.

Reward success, Provide incentives and motivators. Praise the winners. Address failure in balance with the circumstances.

7. Create a climate of pride.

Quality treatment begets quality performance. Never forget the organization begins and ends sinks or swims with its people. Treat them well and consider them first.

Types of organization structures: refer to the way in which an organization's activities are divided, grouped, and coordinated into relationships between managers and employees, managers and managers, and employees and employees. There are different types of organizational structures and a company should choose the one that best suits their needs.

Traditional structures: These are the structures that are based on useful division and departments. These are the kind of structures that chase the organization's rules and measures. They are characterized by having precise authority lines for all levels in the management. Under traditional structures are:

Line Structure - this is the kind of structure that has a very precise line of command. The approvals and orders in this kind of structure come from top to bottom in a line. Hence the name line structure. This kind of structure is suitable for smaller organizations like small accounting firms and law offices. This is the kind of structure that allows for easy decision making and also very casual in nature. They have fewer departments, which makes the entire organization a much decentralized one.

Line and Staff Structure - though line structure is proper for most organizations, particularly small ones, it is not efficient for larger companies. This is where the line and staff organizational structure comes into play. Line and staff structure combines the line structure where information and approvals come from top to bottom, with staff departments for support and specialization. Line and staff organizational structures are more centralized. Managers of line and staff have authority over their subordinates, but staff managers have no authority over line managers and their subordinates. The decision making process becomes slower in this type of organizational structure because of the layers and guidelines that are typical to it, and let's not forget the formality involved.

Functional structure - this kind of organizational structure classifies people according to the function they perform in their professional life or according to the functions performed by them in the organization. The organization chart for a functional based organization consists of Vice President, Sales department, Customer Service Department, Engineering or production department, accounting department and Administrative department.


Mainly used by smaller firms.

Makes efficient use of specialize resources.

Easy supervision.

Easier to mobilize skills and bring them where they are most needed.


Delay to get quick decisions

Difficult to conclude accountability and performance at functional level.

Divisional/Product structures: often referred to as organization by division, when a company's departmentalization becomes too complex for coordination in the functional structure, top management will generally create semiautonomous division. In each division, management and employees design, produce, and market their own products.


Single boss.

High work performance.

Quick decisions.

Accountability is clear.


Eliminates economies of scale in functional departments.

Leads to poor coordination across product lines.

Eliminates in-depth competence and technical specialization.

Makes integration and standardization across product lines difficult.

Source: Adapted from Robert Duncan, "What Is the

Right Organization Structure? Decision Tree Analysis

Provides the Answer," Organizational Dynamics

(Winter 1979):

Matrix organization: this is a structures which is a combination of functional and product structure. This combines the best of both worlds to make an efficient organizational structure. This structure is most complex organizational structure.

It is important to find an Organizational Structure that works best for the Organization, as the wrong setup hamper proper functioning in the Organization.


Formal organizational structure

Informal organizational structure

Formal organizational structure:

Informal organizational structure: Herbert A. Simon has described this as "the in interpersonal relationships in the organization that affect decisions within it but either are omitted from the formal scheme or are not consistent with it. For example, during a busy period, one employee may turn to another for help rather than going through a manager. Or an employee in sales may establish a working relationship with an employee in production, who can provide information about product availability faster than the formal reporting system. One of the first scholars to recognize the importance of the informal structures was Chester Barnard. He noted that informal relationships help organization members to satisfy their social needs and get things done.

Vertical Organizational Structure

Horizontal Organizational Structure

Difference between Traditional and Modern Organization:

The traditional organizational structure was established and became popular in the first part of the 20th century, a time, where multilayered beauracracies were seen as the most effective and efficient approach to manage large, complex corporations. Constraints on transportation, modest education levels among the workforce, and the limited technical ability to collect, display, and transmit information were the important factors that led to the creation of a strong, centralized management system where managers did the thinking and workers were expected to do the assigned work without a question. The traditional organization was therefore causal and goal orientated. Managers run the organization by hierarchy, authority, control and rules. We could compare the traditional model to an effective, well-built machine, with clearly differentiated functional components working reliably and accurate to accomplish predetermined goals.

The modern organization on the other hand emphasis on strategic management and takes the growth of the decentralized organization into perspective. The informational flow in the modern organization is not directed in just one way. This means that a communication between the management and the workforce can take place in either way. The modern organization also has fewer layers than the traditional structure. This means that the hierarchy is not so complex and therefore not so specifically defined. This makes it more difficult for the management and for department managers to control and regulate their departments, since the chain of command is not as clear as in the traditional organization. In modern organization the goals are not as causal as in traditional organization, which means that they are more diverse and are influenced by a lot of factors, such as strategic planning, teamwork, creativity and individual responsibility towards the incentive of the organization itself.


By clearly defining the organizational structure of an organization managers have the ability to plan strategic maneuvers. Companies, who clearly define their organizational structure and post their Organizational flow chart, along with the job descriptions and delegate responsible authorities in each department of the corporation, can be sure that the employees and the management can establish a better communication and working relationship. This helps the management and also the workforce to understand the company and to know what place they hold in the corporation. Problems will always occur when managers don't know their competences or aren't sure what the structural proceedings expect from them regarding their function and authority. This has great impact on the productivity of an organization and should therefore be clear.