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PROPRA2 - Module1 (Part2)

The document discusses the four major types of organizational structures in business: functional, divisional, matrix, and flat. A functional structure groups employees by specialty, while a divisional structure groups them by product or service. A matrix structure is a hybrid that allows employees to report to different managers for different projects. A flat structure eliminates middle managers so employees act more autonomously.

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Cidro Jake Tyron
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22 views

PROPRA2 - Module1 (Part2)

The document discusses the four major types of organizational structures in business: functional, divisional, matrix, and flat. A functional structure groups employees by specialty, while a divisional structure groups them by product or service. A matrix structure is a hybrid that allows employees to report to different managers for different projects. A flat structure eliminates middle managers so employees act more autonomously.

Uploaded by

Cidro Jake Tyron
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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The Four Major Types of

Organizational Structures in Business


PROPRA2
• The types of organizational structures in business are just as
important as its products, marketing plan and long-term strategy.
Businesses need a sturdy structure to attract and retain talented
employees, as well as create a workable organizational hierarchy.
https://online.pointpark.edu/business/types-of-organizational-structures/
Picking The Right Organizational Structure
• While there are variations, most companies are created based on one
of the following four organizational structures. The goal for business
leaders is picking the structure that works best for their particular
situation. https://online.pointpark.edu/business/types-of-organizational-structures/
Functional
• A functional structure is the most traditional approach. It calls for
grouping together people who do similar tasks based on their area of
specialty. In other words, you’ll find all the accountants in finance and
all the marketers in marketing. Managers led each area and report up
to a director or executive who may oversee multiple departments.
https://online.pointpark.edu/business/types-of-organizational-structures/
• The advantage here is clear: it provides those with similar abilities the
ability to easily communicate and work on projects together. That’s
also the reason this is the most popular business structure. The
disadvantage is that teams may get “siloed,” unaware of what is
happening in other areas of a company.
https://online.pointpark.edu/business/types-of-organizational-structures/
Divisional
• In a divisional structure, people are grouped together based on the
product or service they provide, not the work they do. For example, a
large corporation such as General Electric has divisions for electronics,
transportation, and aviation, each with its own team of accountants,
marketers, etc. Global corporations may have divisions based on
different geographic areas. On a smaller scale, a restaurant that also
provides catering services may have separate divisions to oversee
weddings, corporate events and business within the main restaurant.
https://online.pointpark.edu/business/types-of-organizational-structures/
Matrix
• A matrix structure is a hybrid of the functional and divisional
structures. It may involve employees reporting to different bosses
depending on their current assignment. For example, a software
design specialist may report to her boss in IT, but she’s also brought
onto specific projects because of her expertise. When that happens,
she will report to a different boss as long as that project continues.
https://online.pointpark.edu/business/types-of-organizational-structures/
• The disadvantage is that employees may find it confusing to report to
multiple bosses. But clear communication on priorities at all levels can
eliminate these issues. The matrix structure requires a great deal of
planning but can allow for the creation of the best possible teams to
tackle the biggest challenges.
https://online.pointpark.edu/business/types-of-organizational-structures/
Flat
• The flat structure dispenses with the usual hierarchy of a functional
structure, decentralizing management and doing away with the need
for middle manager bosses. Employees essentially act as their own
boss, giving them the ability to communicate directly with peers on
ideas and projects.
https://online.pointpark.edu/business/types-of-organizational-structures/
• The advantage is a lot more freedom for employees, which requires a
group of self-starters who don’t need managers checking up daily on
their work. A flat structure is common in incubators and startups
where the focus is on product and services design, not production or
top-down management structures.
https://online.pointpark.edu/business/types-of-organizational-structures/

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