Organizational Structure - Revision history

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 == See Also ==
 <div style="column-count:2;-moz-column-count:4;-webkit-column-count:4">
 *[[Flat Organizational Structure]]
 *[[Holacratic Organizational Structure]]
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 *[[Organization Chart]]
 *[[Organization Design]]
 </div>

← Older revision		Revision as of 10:49, 5 April 2023
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−	'''Organizational Structure''' is a system used to define a hierarchy within an organization. It identifies each job, its function and where it reports to within the organization. This structure is developed to establish how an organization operates and assists an organization in obtaining its goals to allow for future growth. The structure is illustrated using an organizational chart.<ref>[https://smallbusiness.chron.com/meaning-organizational-structure-3803.html Definition - What Does Organizational Structure Mean? Chron]</ref>	+	'''Organizational Structure''' is a system used to define a hierarchy within an [[organization]]. It identifies each job, its function and where it reports to within the organization. This structure is developed to establish how an organization operates and assists an organization in obtaining its goals to allow for future growth. The structure is illustrated using an organizational chart.<ref>[https://smallbusiness.chron.com/meaning-organizational-structure-3803.html Definition - What Does Organizational Structure Mean? Chron]</ref>

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 == See Also ==
 <div style="column-count:2;-moz-column-count:4;-webkit-column-count:4">
-[[Organization]]<br />
+*[[Flat Organizational Structure]]
-[[Flat Organizational Structure]]<br />
+*[[Holacratic Organizational Structure]]
-[[Holacratic Organizational Structure]]<br />
+*[[Hierarchical Organization]]
-[[Hierarchical Organization]]<br />
+*[[Holacracy]]
-[[Holacracy]]<br />
+*[[Adhocracy]]
-[[Adhocracy]]<br />
+*[[Bureaucracy]]
-[[Bureaucracy]]<br />
+*[[Organization Breakdown Structure (OBS)]]
-[[Organization Breakdown Structure (OBS)]]<br />
+*[[Organization Chart]]
-[[Organization Chart]]<br />
+*[[Organization Design]]
 </div>

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 The key to profitable performance is the extent to which four business elements are aligned:
 *[[Leadership]]. The individuals responsible for developing and deploying the strategy and monitoring results.
-*[[Organization.]] The structure, processes and operations by which the strategy is deployed.
+*[[Organization]]. The structure, processes and operations by which the strategy is deployed.
 *Jobs. The necessary roles and responsibilities.
 *People. The experience, skills and competencies needed to [[Strategy Execution|execute the strategy]].
@@ Line 96: / Line 96: @@
 *Which work is mission-critical, can be scaled back or should be eliminated.
 *Existing role requirements, while identifying necessary new or modified roles.
-*Key metrics and accountabilities.
+*Key [[Metrics|metrics]] and accountabilities.
-*Critical information flows.
+*Critical [[Information Flow|information flows]].
 *[[Decision Making]] authority by organization level.
 == Emerging Trends in Organizational Structure<ref>Emerging Trends in Organizational Structure [https://www.referenceforbusiness.com/management/Ob-Or/Organizational-Structure.html Reference for Business]</ref> ==
-Except for the matrix organization, all the structures described above focus on the vertical organization; that is, who reports to whom, who has responsibility and authority for what parts of the organization, and so on. Such vertical integration is sometimes necessary, but may be a hindrance in rapidly changing environments. A detailed organizational chart of a large corporation structured on the traditional model would show many layers of managers; decision making flows vertically up and down the layers, but mostly downward. In general terms, this is an issue of interdependence.
+Except for the matrix organization, all the structures described above focus on the [[Vertical Organizational Structure|vertical organization]]; that is, who reports to whom, who has responsibility and authority for what parts of the organization, and so on. Such [[Vertical Integration|vertical integration]] is sometimes necessary, but may be a hindrance in rapidly changing environments. A detailed organizational chart of a large corporation structured on the traditional model would show many layers of managers; decision making flows vertically up and down the layers, but mostly downward. In general terms, this is an issue of interdependence.
-In any organization, the different people and functions do not operate completely independently. To a greater or lesser degree, all parts of the organization need each other. Important developments in organizational design in the last few decades of the twentieth century and the early part of the twenty-first century have been attempts to understand the nature of interdependence and improve the functioning of organizations in respect to this factor. One approach is to flatten the organization, to develop the horizontal connections and de-emphasize vertical reporting relationships. At times, this involves simply eliminating layers of middle management. For example, some Japanese companies—even very large manufacturing firms—have only four levels of management: top management, plant management, department management, and section management. Some U.S. companies also have drastically reduced the number of managers as part of a downsizing strategy; not just to reduce salary expense, but also to streamline the organization in order to improve communication and decision making.
+In any organization, the different people and functions do not operate completely independently. To a greater or lesser degree, all parts of the organization need each other. Important developments in [[Organization Design|organizational design]] in the last few decades of the twentieth century and the early part of the twenty-first century have been attempts to understand the nature of interdependence and improve the functioning of organizations in respect to this factor. One approach is to flatten the organization, to develop the horizontal connections and de-emphasize vertical reporting relationships. At times, this involves simply eliminating layers of middle management. For example, some Japanese companies—even very large manufacturing firms—have only four levels of management: top management, plant management, department management, and section management. Some U.S. companies also have drastically reduced the number of managers as part of a [[Downsizing|downsizing]] strategy; not just to reduce salary expense, but also to streamline the organization in order to improve communication and decision making.
-In a virtual sense, technology is another means of flattening the organization. The use of computer networks and software designed to facilitate group work within an organization can speed communications and decision making. Even more effective is the use of intranets to make company information readily accessible throughout the organization. The rapid rise of such technology has made virtual organizations and boundaryless organizations possible, where managers, technicians, suppliers, distributors, and customers connect digitally rather than physically.
+In a virtual sense, technology is another means of flattening the organization. The use of [[Network|computer networks]] and [[Software|software]] designed to facilitate group work within an organization can speed communications and decision making. Even more effective is the use of [[Intranet|intranets]] to make company [[Information|information]] readily accessible throughout the organization. The rapid rise of such technology has made [[Virtual Organization|virtual organizations]] and [[Boundaryless Organization|boundaryless organizations]] possible, where managers, technicians, suppliers, distributors, and customers connect digitally rather than physically.
-A different perspective on the issue of interdependence can be seen by comparing the organic model of organization with the mechanistic model. The traditional, mechanistic structure is characterized as highly complex because of its emphasis on job specialization, highly formalized emphasis on definite procedures and protocols, and centralized authority and accountability. Yet, despite the advantages of coordination that these structures present, they may hinder tasks that are interdependent. In contrast, the organic model of organization is relatively simple because it de-emphasizes job specialization, is relatively informal, and decentralizes authority. Decision-making and goal-setting processes are shared at all levels, and communication ideally flows more freely throughout the organization.
+A different perspective on the issue of interdependence can be seen by comparing the [[Organic Model of Organization|organic model of organization]] with the [[Mechanistic Model of Organization|mechanistic model]]. The traditional, mechanistic structure is characterized as highly complex because of its emphasis on job specialization, highly formalized emphasis on definite procedures and protocols, and centralized authority and accountability. Yet, despite the advantages of coordination that these structures present, they may hinder tasks that are interdependent. In contrast, the organic model of organization is relatively simple because it de-emphasizes job specialization, is relatively informal, and decentralizes authority. Decision-making and goal-setting processes are shared at all levels, and communication ideally flows more freely throughout the organization.
 A common way that modern business organizations move toward the organic model is by the implementation of various kinds of teams. Some organizations establish self-directed work teams as the basic production group. Examples include production cells in a manufacturing firm or customer service teams in an insurance company. At other organizational levels, cross-functional teams may be established, either on an ad hoc basis (e.g., for problem solving) or on a permanent basis as the regular means of conducting the organization's work. Aid Association for Lutherans is a large insurance organization that has adopted the self-directed work team approach. Part of the impetus toward the organic model is the belief that this kind of structure is more effective for employee motivation. Various studies have suggested that steps such as expanding the scope of jobs, involving workers in problem solving and planning, and fostering open communications bring greater job satisfaction and better performance.

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 == Types of Organizational Structures<ref>What are the Different Types of Organizational Structures? [https://www.businessnewsdaily.com/15798-types-of-organizational-structures.html Business News Daily]</ref> ==
-*Hierarchical Structure: A hierarchical structure, also known as a line organization, is the most common type of organizational structure. Its chain of command is the one that likely comes to mind when you think of any company: Power flows from the [[board of directors]] down to the [[Chief Executive Officer (CEO)|CEO]] through the rest of the company from top to bottom. This makes the hierarchical structure a centralized organizational structure. In a hierarchical structure, a staff director often supervises all departments and reports to the CEO. There are two types of Hierarchical Structures:
+*Hierarchical Structure: A hierarchical structure, also known as a line organization, is the most common type of organizational structure. Its chain of command is the one that likely comes to mind when you think of any company: Power flows from the [[Board of Directors|board of directors]] down to the [[Chief Executive Officer (CEO)|CEO]] through the rest of the company from top to bottom. This makes the hierarchical structure a centralized organizational structure. In a [[Hierarchical Organization|hierarchical structure]], a staff director often supervises all departments and reports to the CEO. There are two types of Hierarchical Structures:
 **Functional Structure: The functional structure is a centralized structure that greatly overlaps with the hierarchical structure. However, the role of a staff director instead falls to each department head – in other words, each department has its own staff director, who reports to the CEO.
 **Divisional Structure: The centralized structure, known as a divisional organization, is more common in enterprise companies with many large departments, [[Market|markets]] or territories. For example, a food conglomerate may operate on a divisional structure so that each of its food lines and products can have full autonomy. In the divisional structure, each line or [[product]] has its own [[Chief Executive Officer (CEO)|chief commanding executive]].
@@ Line 21: / Line 21: @@
-*Flat Structure: A flat structure is a decentralized organizational structure in which almost all employees have equal power. At most, executives may have just a bit more authority than employees, as seen in the figure below. This organizational structure is common in startups that take a modern approach to work or don't yet have enough employees to divide into departments.
+*Flat Structure: A [[Flat Organizational Structure|flat structure]] is a decentralized organizational structure in which almost all employees have equal power. At most, executives may have just a bit more authority than employees, as seen in the figure below. This organizational structure is common in startups that take a modern approach to work or don't yet have enough employees to divide into departments.
@@ Line 28: / Line 28: @@
-Matrix Structure: The matrix structure is a fluid form of the classic hierarchical structure. This centralized organization structure allows employees to move from one department to another as needed, as the horizontal lines in this matrix organization figure below indicates.
+Matrix Structure: The [[Matrix Organization|matrix structure]] is a fluid form of the classic hierarchical structure. This centralized organization structure allows employees to move from one department to another as needed, as the horizontal lines in this matrix organization figure below indicates.

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 [[File:Project Org Structure.png|400px|Project Org Structure]]<br />
 source: Lumen Learning
@@ Line 106: / Line 116: @@
 == See Also ==
 [[Flat Organizational Structure]]<br />
 [[Holacratic Organizational Structure]]<br />
@@ Line 112: / Line 124: @@
 [[Adhocracy]]<br />
 [[Bureaucracy]]<br />
 == References ==
 <references/>

@@ Line 2: / Line 2: @@
-'''Centralized vs. Decentralized Organizational Structures<ref>Centralized vs. Decentralized Organizational Structures [https://www.investopedia.com/terms/o/organizational-structure.asp Investopedia]</ref>'''<br />
+__TOC__
 An organizational structure is either centralized or decentralized. Traditionally, organizations have been structured with centralized leadership and a defined chain of command. The military is an organization famous for its highly centralized structure, with a long and specific hierarchy of superiors and subordinates. In a centralized organizational system, there are very clear responsibilities for each role, with subordinate roles defaulting to the guidance of their superiors.
@@ Line 8: / Line 11: @@
-'''Types of Organizational Structures<ref>What are the Different Types of Organizational Structures? [https://www.businessnewsdaily.com/15798-types-of-organizational-structures.html Business News Daily]</ref>'''<br />
+== Types of Organizational Structures<ref>What are the Different Types of Organizational Structures? [https://www.businessnewsdaily.com/15798-types-of-organizational-structures.html Business News Daily]</ref> ==
 *Hierarchical Structure: A hierarchical structure, also known as a line organization, is the most common type of organizational structure. Its chain of command is the one that likely comes to mind when you think of any company: Power flows from the [[board of directors]] down to the [[Chief Executive Officer (CEO)|CEO]] through the rest of the company from top to bottom. This makes the hierarchical structure a centralized organizational structure. In a hierarchical structure, a staff director often supervises all departments and reports to the CEO. There are two types of Hierarchical Structures:
 **Functional Structure: The functional structure is a centralized structure that greatly overlaps with the hierarchical structure. However, the role of a staff director instead falls to each department head – in other words, each department has its own staff director, who reports to the CEO.
@@ Line 53: / Line 56: @@
-'''History of Organizational Structure<ref>History of Organizational Structure [https://en.wikipedia.org/wiki/Organizational_structure Wikipedia]</ref>'''<br />
+== History of Organizational Structure<ref>History of Organizational Structure [https://en.wikipedia.org/wiki/Organizational_structure Wikipedia]</ref> ==
 Organizational structures developed from the ancient times of hunters and collectors in tribal organizations through highly royal and clerical power structures to industrial structures and today's post-industrial structures.
@@ Line 61: / Line 64: @@
-'''Business Case for Organizational Structure<ref>Making a Business Case for Organizational Structure [https://www.shrm.org/resourcesandtools/tools-and-samples/toolkits/pages/understandingorganizationalstructures.aspx SHRM]</ref>'''<br />
+== Business Case for Organizational Structure<ref>Making a Business Case for Organizational Structure [https://www.shrm.org/resourcesandtools/tools-and-samples/toolkits/pages/understandingorganizationalstructures.aspx SHRM]</ref> ==
 A hallmark of a well-aligned organization is its ability to adapt and realign as needed. To ensure long-term viability, an organization must adjust its structure to fit new economic realities without diminishing core capabilities and competitive differentiation. Organizational realignment involves closing the structural gaps impeding organizational performance.
-''Problems created by a misaligned organizational structure''<br />
+'''''Problems created by a misaligned organizational structure'''''<br />
 Rapid reorganization of business units, divisions or functions can lead to ineffective, misaligned organizational structures that do not support the [[Business|business]]. Poorly conceived reorganizations may create significant problems, including the following:
 *Structural gaps in roles, [[Workflow|work processes]], accountabilities and critical information flows can occur when companies eliminate middle management levels without eliminating the work, forcing employees to take on additional responsibilities.
@@ Line 71: / Line 74: @@
 *Declining [[Employee Engagement|workforce engagement]] can reduce retention, decrease [[customer loyalty]] and limit [[Organizational Performance|organizational performance]] and [[Stakeholder|stakeholder]] value.<br />
-''The importance of aligning the structure with the [[business strategy]]''<br />
+'''''The importance of aligning the structure with the [[business strategy]]'''''<br />
 The key to profitable performance is the extent to which four business elements are aligned:
 *Leadership. The individuals responsible for developing and deploying the strategy and monitoring results.
@@ Line 88: / Line 91: @@
-'''Emerging Trends in Organizational Structure<ref>Emerging Trends in Organizational Structure [https://www.referenceforbusiness.com/management/Ob-Or/Organizational-Structure.html Reference for Business]</ref>'''<br />
+== Emerging Trends in Organizational Structure<ref>Emerging Trends in Organizational Structure [https://www.referenceforbusiness.com/management/Ob-Or/Organizational-Structure.html Reference for Business]</ref> ==
 Except for the matrix organization, all the structures described above focus on the vertical organization; that is, who reports to whom, who has responsibility and authority for what parts of the organization, and so on. Such vertical integration is sometimes necessary, but may be a hindrance in rapidly changing environments. A detailed organizational chart of a large corporation structured on the traditional model would show many layers of managers; decision making flows vertically up and down the layers, but mostly downward. In general terms, this is an issue of interdependence.
@@ Line 102: / Line 105: @@
-===See Also===
+== See Also ==
 [[Flat Organizational Structure]]<br />
 [[Holacratic Organizational Structure]]<br />
@@ Line 111: / Line 114: @@
-===References===
+== References ==
 <references/>

@@ Line 85: / Line 85: @@
 *Key metrics and accountabilities.
 *Critical information flows.
-[[Decision Making|Decision-making]] authority by organization level.
+*[[Decision Making|Decision-making]] authority by organization level.