Centralized, decentralized, linear, horizontal, traditional, matrix … there are several organizational structure examples, and each one is better suited to a particular business type and process model.
In this post, we’ll analyze 5 of them, and give examples. So you can understand their advantages and disadvantages and choose which one to employ in your organization.
Organizational structure examples
There are several types of organizational structures, but 3 of them stand out, with the first presenting 3 sub-types.
Let’s discuss the characteristics of each of them and exemplify business areas that best fit these different organizational structure styles.
1- Inline, functional and staff aligned structures
Organizational structure examples – Inline
The traditional inline structure is organized in such a way in which a president or CEO is at the top. Then there are directors or VP’s of specific areas, followed by managers and so on. And operational personnel are at the bottom, like in this figure:
This is a very rigid structure, with little information exchange, typical of bureaucratic companies in which there is little collaboration.
Nowadays, it’s not usual but still practiced on the military, religious, and even academic organizations. In this way, one area doesn’t interfere with the work of the other and staff only obey the ‘orders’ of the immediate superior.
Organizational structure examples – Functional
The functional organizational structure is similar to the Inline structure; the difference is that employees in an area need to report to many directors.
For instance, an HR manager may call upon a finance department employee to handle a matter related to this area, as well as that of IT and others.
This is a way to combat centralization and excessive specialization in tasks in your area.
Here’s what this hierarchy looks like:
This is the most active structure today in many companies and organizations, but this doesn’t mean that it’s the best.
Everything will depend on the relationship between managers and, especially, on the appropriate use of Information Technology to aid in internal communication.
This is one of the best organizational structure examples, which is in use in manufacturing, hotels, medium-sized car repair shops, medical clinics, or another type of businesses, where informal structures allow for functional control over employees without generating conflicts between managers.
Organizational structure examples – Staff aligned
In this case, the organizational structure of the company is similar to the Inline structure. The difference is that there is staff that advises, gives opinions, makes reports, authorize and support the organization.
Organizational structure examples of this type are insurance companies, engineering firms, law firms, regulatory agencies, and other organizations where a company needs to isolate technical advice to assist employees who handle or manage the day-to-day operations on the front line.
2- Project-based structure
Highly dynamic and creative companies, such as software developers, architecture firms, special industrial equipment installation projects, event organization companies and others typically use this structure. A series of specialized employees, ready to compose a work team as needed characterize this structure.
With each project, these collaborators report to a different leader. Once they complete the project, a manager assigns them a new project and a leader.
3- Matrix structures
This structure is widely used both by companies that are constantly launching new products and marketing campaigns. For example, companies that have project based structures, but also believe that functional supervision is necessary and important.
An example of a business that would benefit from this type of organizational hierarchy is a consultancy for installing ERP Software.
Each project must act independently. Therefore, it’s important to have a senior manager of each department (finance, operations, HR, marketing etc.) that can verify that everything is in accordance with policies and the level of services appropriate for the company.
Finding out some of the best organizational structure examples is critical, as well as modeling and automating your processes.