Types Of Organization Structure

In this tutorial, we will learn about types of organization structure is a system that outlines how certain activities directed to achieve the goals of an organization. 

An organizational structure is a system that outlines how certain activities are directed to achieve the goals of an organization. These activities can include rules, roles, and responsibilities. The organizational structure also determines how information flows between levels within the company. These are two types of:


Formal Structure:

  • Line Organization
  • Functional Organization
  • Line and Staff organization
  • Project Management Organization
  • Matrix Organization

Line Organization:

Under this, the managers have the direct responsibility of accomplishing any task. It is also known as a scalar organization. It promotes the Unity of Command and is stable, economical, and useful.

Line organization identifies authority, responsibility, and accountability at each level. The personnel in line organization are directly involved in achieving the objectives of the organization.

Functional Organization: 

All similar type of work is grouped in one department which is under one senior. It ensures the division of labor and specialization based on individual proficiency and knowledge.

It allows decisions to be decentralized since issues are delegated to specialized persons or units, leaving them the responsibility of implementing, evaluating, or controlling the given procedures.

Line And Staff Organization: 

The staff managers assign the duties to the line so that the staff managers get time for more critical tasks, which are not routine. The line is supplementary by staff.

For example, human resources, accounting, public relations, and the legal department generally considered to be staff functions.

Project Management Organization: 

Under this type of organization, a manager is selected from the organization itself and assigned the responsibility of completing a well-defined project.

An appointment of the project manager, who is usually from the middle management ranks. The project manager is responsible for detailed planning., coordination, and control. Project managers are also responsible for the achievement of the project.

Matrix Organization: 

It combines functional departments with project organizations. The operational department constitutes vertical chains of command, while project organizations constitute a horizontal chain of command.

Matrix organization form may vary from one in which the project managers hold a dominant managerial position to one in which he plays only a coordinating role.

To illustrate the organizational principles, a matrix will be considered first in which there is a balance of power between the project and functional managers. It must be recognized that such a balanced situation, considered by some authorities to be ideal, probably seldom occurs in practice.

Informal Structure: 

It is a network of personal and social relationships that not established as required by the formal organization. It consists of a dynamic set of personal relationships, social networks, communities of common interest, and emotional sources of motivation.

Features Of Informal Structure:

  • These represent the human psychology to socialize in the organization.
  • The authority flows upward and horizontally.
  • Informal authority is earned, not delegated.

Functions\Merits Of Informal Structure: 

  • It provides social satisfaction and maintains liberal values and lifestyles.
  • Tends to encourage co-operation.
  • It provides a useful channel for communication.
  • Humans are social animals. They need to socialize exists deep within our existence. The informal organization ensures that there is socialization within the enterprise. Consequently, members experience a sense of belongings and job satisfaction.
  • Fraternal organization, getting real feedbacks, and reactions are not natural. Hence, informal organization, various limitations of formal organization is covered up.

Demerits\Limitations Of Informal Structure:

  • Resistance to change.
  • Role conflicts
  • Conformity
  • Rumour