Organizational Structure: What It Is, Types, Characteristics And Components
Organizational structures are the systems that define companies through a reference framework, indicating what their structure is, how communication occurs between its parts and the allocation of resources, among other aspects.
Next Let’s see what organizational models or structures are seeing their main characteristics, the elements that make them up and what types there are.
An organizational structure or organizational model is the system that defines a company through its referential framework, including lines of authority, communications, duties, and resource allocation This structure determines how activities are directed towards achieving the company’s objectives, assigning tasks, coordinating the parties involved and supervising employees.
A company can be structured in many different ways depending on what objectives it aims to achieve. The structure of an organization will determine the way in which the company will function and operate With the organizational model, responsibilities are explicitly assigned and what functions its parts must perform, in addition to clarifying what the processes are for the organizational machinery to function properly.
The organizational structure is also key because it determines which individuals can participate in decision making and to what extent their opinions and points of life will shape the company’s actions. As each organization is different and aspires to varied objectives, the ideal organizational model will depend greatly on the nature of the company, its context, needs, aspirations and adversities it is going through.
The organizational structure must be reviewed often by business leaders because, as the context and resources can change, it is necessary to ensure that the proposed model continues to help the company achieve its strategic objectives and its mission. Also Care must be taken to ensure that processes respond to industry standards in addition to meeting the labor, safety, health and well-being requirements of workers.
Characteristics of organizational structures
To work most efficiently, organizations require 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 characteristics of organizational structures.
1. Well-defined structure
As its name indicates, we are talking about a structure, a model that as such must be well defined. Any organizational structure must have an established framework where the hierarchy is defined The structure must clearly define each job within the company, indicating its function, scope and senior management.
To avoid confusion, the structure must be well documented and easily accessible to all workers, specifying what each one does. Confusion about tasks and roles, or some workers spending time on tasks that are out of their scope, should be avoided as much as possible.
Naturally, in every company there must be good communication between its parts. A good organizational structure will make it clear what the communication hierarchy is, indicating how workers communicate with each other depending on the situations The organizational model describes how tasks are delegated and communicated to workers, how employees keep management updated on their tasks, and how and through what channels they can present their complaints or suggestions.
3. Clear vision
Organizations must have a vision, something that helps them establish the goals and objectives to achieve. This vision must be clear and concrete during the development of the organizational structure. With her, The values that are defended in the organization, what it wants to achieve and what its moral and ethical limits are are clearly defined At the same time, the vision must be concise, clearly directing where the company is going.
4. Departmentalization
Departmentalization refers to the way in which a company brings together various sectors of its organization Organizational models can bring together different fragments of the organization based on various aspects, such as its 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 refers to the company’s line of authority, indicating who reports to whom It refers to the number of subordinate employees over whom managers have authority.
6. Centralization
This feature refers how centralized or decentralized the organizational structure has been established In decentralized organizations, decision-making responsibilities are spread to lower-level managers and also to some non-managerial employees, while in centralized organizations, control and decision-making responsibilities are kept near the top of the organization..
What makes an organization more centralized or more decentralized depends on several factors, including the hierarchical levels of the company itself or the degree to which it is geographically dispersed.
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Elements and components
According to Henry Mintzberg, a Canadian academic specialized in business and business management, in organizational structures it is possible to identify a series of general elements, which he explains in extensive detail in his book “The Structuring of Organizations” (1979). They are the following.
1. Strategic apex
At the top of the organization we find the strategic apex, whose main objective is ensure that the company fulfills its mission and manages its relationship with the environment Senior management, which could well be considered synonymous with the strategic apex, establishes long-term business strategies and policies with which it is intended to achieve the stated objectives.
Below the apex, we would find the midline. This is a group of middle managers responsible for convert the general strategic objectives and plans commissioned by the strategic apex into detailed plans, oriented to be put into practice in the form of operational action plans.
Action plans will be carried out by workers, specifying managerial responsibilities for particular tasks and how resources will be allocated. Middle managers are also responsible for supervising activities and taking action to ensure that resources are used in the most efficient way to achieve the company’s objectives.
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3. Technostructure
The larger a company is, the more complexity it becomes, developing a separate group of people who care about the best way to get the job done. These employees specify exit criteria and ensure that staff have the appropriate skills This group is what 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
In the company you can also find other administrative functions not directly related to the organization’s mission , such as public relations, cafeteria, consulting. This part of the organizational structure is known as support staff.
In this support staff we would also find people who carry out functions such as research and development, public relations and legal services. Although its products and services do not directly contribute to the core purposes of the organization, its activities improve the efficiency and effectiveness of the strategic apex, the middle line and the operational core.
5. Operating core
The operational core is the bottom part of the organization. Is about employees who perform the basic work of producing products or providing services
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Types of structures
We can talk about several types of organizational structure, the main ones being the following.
1. Simple organization
Simple organizations have a flexible organizational structure, often driven by leaders with an entrepreneurial and innovative mentality. This model is usually the one seen when a company has just taken its first steps and is still in its infancy, managed by its owners who often provide the workforce themselves. It has a simple and flat structure, made up 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 goals and maintain their vision of the future. However, it has drawbacks such as the limited structure itself, poor task discipline (its workers are often amateurs) and little management control if the work processes are not clearly defined.
As organizations grow, their managers must make more and more decisions , which can overwhelm them. Therefore, they end up hiring more employees, which causes the company structure to become more sophisticated and more complex.
2. Organization of machinery
Machinery or bureaucratic organization is especially common in government agencies and other types of large corporations. What most defines this type of organization is its high standardization the work being very formalized and jobs are clearly defined.
There are many procedures within the company and it is usually the case that decision-making is centralized, with functional departments to delegate some tasks.
All functional lines rise to the top, allowing senior managers to maintain centralized control Well set up, these organizations can become very efficient.
3. Professional organization
The professional organization resembles the bureaucratic one, but is characterized by a high degree of professional knowledge Employees are technically trained to carry out specialized skills autonomously.
Thanks to this, there is more decentralized decision making than that seen in bureaucratic-type organizations. This structure is common in places such as universities, law offices or banks.
Its main disadvantage is the lack of control that senior executives can have over workers because authority and power are distributed through the hierarchy.
4. Divisional organization
The divisional structure is common in large companies with several business units. These corporations They divide their businesses and products into divisions to promote sector-specific management Most commonly, there is centralized control, with divisional vice presidents overseeing all facets of work in each of their divisions.
The main benefit of the divisional structure is that it allows line managers to have greater control and responsibility than in the machine structure. However, one of its most important weaknesses is the duplication of activities and resources. In addition, the divisions can fall into conflicts because each one needs to compete for the limited resources assigned from the corporate leadership.
5. Adhocracy
Adhocracy is a highly innovative type of organization. In new industries, companies need to innovate and work ad hocdeveloping solutions specifically tailored to their most immediate context in order to survive.
The great advantage of adhocracy is that maintain a core 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. Because of this, adhocracies can respond quickly to changes, bringing together experts capable of facing new challenges.
But, it brings with it problems such as conflict, especially when power and authority are unclear. In addition, having to deal with very sudden changes can be psychologically and physically exhausting for workers, stressed by the uncertainty of not having a well-established routine. This makes it difficult to retain talent.
