Organizational Structures

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Organizational Structures

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Every organization has some sort of structure. It can be informal or formalized on a chart. There are three types of structures: Functional (Departmentalized), Projectized, and Matrix. Each structure has advantages and disadvantages.

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Functional (Departmentalized) Structure

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A type of organizational structure where the organization is divided into departments, each responsible for a specific function.

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Functional (Departmentalized) organization is the oldest and most basic form.

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It is often represented in corporation shareholder reports with clear lines of authority and defined supervisors.

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Characteristics of a functional organization

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Straightforward structure with clear-cut lines of authority and no ambiguity in reporting.

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Purpose of organization charts in functional organizations

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To illustrate lines of reporting and authority using a hierarchical structure.

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Diagram of a functional organization hierarchy

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The chart shows the CEO at the top, followed by VPs of Finance, Production, Engineering, and Marketing, with further subdivisions under each.

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Advantages of Functional Organizations: Clear lines of authority

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The lines of authority are clear in functional organizations.

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Advantages of Functional Organizations: Prioritization of departmental work

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Departmental work is easily prioritized by identified departmental authority.

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Advantages of Functional Organizations: Flexibility in staff use

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There is flexibility in the use of staff in functional organizations.

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Advantages of Functional Organizations: Availability of SMEs

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Subject matter experts (SMEs) are available to work on multiple projects.