The Importance of Defining an Organization Structure

The Importance of Defining an Organization Structure


There is more to an organization than the people, the product, the policies corporate law and marketing campaigns. Organization structure is the term which defines an organization and its policies. Before understanding the various types of organization structure, you need to understand what your long-term plan is, is it based on the service industry, B2B or B2C Company.

Following are a few points which you need to make a note of while deciding on the organization structure:

  • Type of Business/nature of Industry
  • Decentralization
  • Stability & adaptability
  • Strategy
  • Technology

Types of Corporate structure:

1. Functional Structure: Employees are assigned to a particular department according to their skills in an organization to reach each department’s goal.

2. Divisional Structure: Each department works on multiple brands, employees would be equally working on each brand to increase productivity.

3. Matrix Structure: This is a combination of a functional and divisional structure; each department has a director head and a director for each brand. This structure helps in increasing the process of decision-making as the directors are well-aware about the current state of each brand.

4. Hybrid Structure: Similar to Matrix Structure, this model helps in utilizing the resources available in the organization as all the employees are connected with each other and use their knowledge to develop a particular brand. It is a decentralized system with vertical and horizontal functions interacting with each other.

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