Structure of Organization in Management

Structure of Organization in Management-What is Organization in Management Structure-What is the Structure of Organization in Management

The company designs its organizational structure to fill all available positions with competent workers. The operating system defines the capabilities and roles of each function, not only boosting worker productivity but also removing any doubt about whether tasks and reports have been completed. Check out these structure of organization in management to broaden your horizons.

The company’s OS (operating system) structures its human resources to best support the attainment of its goals. Having everyone on the same page as to their roles and responsibilities is crucial to keeping things running smoothly and efficiently inside an organization. To deepen your understanding of principles of organization in management topic, read more extensively.

Structure of Organization in Management

Organizational management should take into account the company’s size, stage of development, goals, and market position, among other factors. Organizational health requires taking into account both the present and the future of the company. This includes thinking about the five-year plan. The structure of organization in management is as follows:

Market-Driven Organizational Divisions

Markets, industries, or types of customers may also serve as the basis for a company’s internal divisions. A market-based organizational structure would describe this type of setup.Market-based organizational structures excel when a company’s offerings are niche-specific. If the company has in-depth understanding of these markets, then the strategy works even better. This structure also keeps the business abreast of the evolving needs of its varied clientele.

Product-Based Organizational Structure

An organizational framework comprises several smaller functional organizations in a divisional structure. If a company structures into departments, then those departments can each have their own set of marketing and sales personnel, etc. Each department in a product-based divisional organization is responsible for managing a single product category. Companies that produce a wide variety of goods can benefit from this setup, since it can shorten the time it takes to bring a new product to market. This makes it easier for startups and small businesses to introduce innovative items to consumers quickly.

Forming a Circle

Despite its outward dissimilarity from the other organizational designs we’ve covered, the circular structure also uses a system, with higher-level employees located in the inner rings and lower-level employees in the outer rings.

However, under a circular structure, CEOs and leaders are not seen as sitting atop the company and sending directives to lower-level employees. Instead, they are the backbone of the company and work tirelessly to make their vision a reality. The structure of organization in management refers to the arrangement of roles, responsibilities, and relationships within a company.

Structure of Networks

Whenever two or more organizations work together to pool their resources or when one organization spans numerous locations, each with its own set of responsibilities and set of managers, a network structure is born. You can also use this structure to show how your company functions if you rely heavily on independent contractors or other firms for the bulk of your workforce or service delivery. The organizational structure is quite similar to that of a division. Highlighting services rendered away from the main office or at a satellite site is possible.

Hierarchical structure

Management in a hierarchical structure assigns a supervisor to each subset of workers. This is the standard way that trade is conducted. Classifying people by their occupation, company, or the goods and services they offer is possible. Management often represents a pyramid due to the various levels of leadership, with the top level at the very top, followed by their direct reports, and so on down the line.

We’ve already established that a pyramid structure suggests a hierarchical organization. There is a clear chain of command from the top of the company to the bottom, with everyone in between reporting to a manager or CEO.

Layout Plane

Most businesses structure themselves like a pyramid, with several levels of management and directors between workers and the top brass. The horizontal organization, on the other hand, eliminates unnecessary layers of management, bringing subordinates closer to the top. It may not have any resemblance to a pyramid at all. As was previously noted, this is also an example of the “Organic Structure” category.

Functional Structure

The functional structure is one of the most common styles of organization, and it separates businesses into sections based on their functions. For instance, a corporation with a well-designed organizational structure might group together its marketers, agents, and customer support personnel. In a hierarchical structure of organization in management, decision-making authority flows from top management down to lower levels.

The company’s functional structure promotes deep specialization and scalability as it grows. In addition, the system’s high automation might make it challenging for an individual to rise through the ranks. Workers benefit from increased exposure to and insight into their respective fields when assigned to skill-based departments.

Location-Based Organizational Divisions

The goods and services are divided up according to location in a geographically structured company. Examples of geographical structure groups include territories, regions, and districts.Companies that rely on delivery and on-site support from suppliers and customers can benefit greatly from such a set-up. It also brings together people from all walks of business life, providing each regional branch with a wider pool of knowledge from which to draw.

Structure Defined by Process

The goal of process-based organizational designs is to improve the efficiency of business operations by streamlining the entire lifecycle of key activities including “Research & Development,” “Customer Acquisition,” and “Order Fulfillment.” In contrast to a purely functional organizational structure, a process-based one takes into account the interdependencies between employees’ various responsibilities.

This graphic must be read from left to right for full comprehension. Until your product is actually for sale, consumer acquisition will have to wait. Until there are paying customers and products to ship, the order fulfillment process cannot start.

Matrix-based Design

A matrix structure deviates from the typical hierarchical pattern of the other structures we’ve looked at so far. Instead, the green-boxed workers report to two separate managers. In most organizations, blue represents the functional reporting line and yellow represents the product reporting line. A flat structure of organization in management minimizes layers of management, promoting a more agile and decentralized decision-making approach.

Solid lines in a matrix structure org chart represent direct reporting relationships, whereas dotted lines represent indirect reporting relationships. In this case, functional reporting is undeniably more important than product-based reporting.


How Efficient are Hierarchical Structures?

The organization also becomes more efficient and effective overall. Thanks to the established division of labor, the company can accomplish more in less time. Furthermore, a well-defined organizational structure provides staff with guidance on how to carry out their duties most efficiently.

How does the Structure of an Organization Function?

Hierarchical listings of departments, divisions, and departments within an organization. Employment, lines of authority, and how decisions are made all flow from the company’s organizational structure. Employee names and titles, as well as basic positions of power, should be included in your organizational structure.

Who is in Charge of the Company’s Structure?

The point of an established structure is to make it crystal clear who is responsible for whom and where everyone is in the hierarchy. One vice president may report to another vice president, who may report to yet another vice president, and so on.


When deciding which company to hire, you need weigh a number of criteria. Some of these factors include the size of the company, the state of the economy, and the age of the company or its products. Although using organizational principles involves a lot of labor, the benefits make it worthwhile. To conclude, the topic of structure of organization in management is of paramount importance for a better future.

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