Different businesses have different types of business organizational structures. And for an organization to function efficiently, it needs to have its own structure. An organizational structure is the character and values that make up an organization. It tells you the way they are formed, how they take decisions, and how they organize to solve problems. Therefore, it is important to understand how an organization operates when you want to do business with them. Below are the different types of business organizational structures for different business organizations.
These types of business organizational structures follow a strict procedure with rules that are properly articulated. It is rigid kind of system where decisions are made from the top and no circumstances will warrant the change of such decisions. One advantage of a bureaucratic organizational structure is the benefit of consistency. Decisions are properly taken by experts which gives no room for errors. However, with the current shift in business trends powered by globalization, there is a problem posed by this type of organizational structure. Because bureaucratic structure is a top-down approach, it prevents the need to make quick decisions which are needed in the present business world. A more flexible organization will be able to adjust speedily to environmental and economic changes to the operation of the business. You can find these types of business organizational structures in several government agencies where decisions have to pass through a very long desk before any action is taken. A bureaucratic organizational structure is also ideal for tall organizations with lots of business units and departments.
Organizations that adhere to these types of business organizational structures normally have the structural resemblance of bureaucratic organization but they are more open to changes and new ideas. They practice some of the new management paradigms such as culture management, team management, and total quality management.
Functional Organizational Structure
In a functional organization, the business units are divided into different functional units to aid proper management. This enables the organization to be more efficient and a lot easier to manage. These types of business organizational structures can be ideal for large organizations that manufacture products in high volumes. With their different functional unit, they will be able to achieve efficiency in each unit thereby translating to efficiency in the overall organization. When the marketing unit does its job well, the production unit does well too, and the sales unit performs excellently well, the entire organization will be successful.
In a divisional structure, the organization share the organization into different divisional units with each division given its own resources to perform effectively.
In a matrix structure, the employees are placed based on the product and the function. This structure is a combination of both the divisional structure and the functional structure. In these types of business organizational structures, teams are frequently been used to complete organizational tasks. They are created to perform a certain function they are knowledgeable. Matrix organizational structures are one of the oldest types of business organizational structures in the world today.