Organizational structure: what it is, types, characteristics and components

Organizational structures are the systems that define companies through a referential framework, indicating its structure, how communication occurs between its parts and the allocation of resources, among other aspects.

Next let's see what are the organizational models or structures, seeing their main characteristics, the elements that compose them and what types there are.

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What is the organizational structure?

An organizational structure or organizational model is the system that defines a company through its frame of reference, including lines of authority, communications, duties, and resource allocation. This structure determines how the activities are directed towards the achievement of the company's objectives, assigning tasks, coordinating the parties involved and supervising the employees.

A company can be structured in very different ways depending on what objectives are intended to be achieved. The structure of an organization

will determine the way in which the company will function and operate. With the organizational model, responsibilities are explicitly assigned and what functions they must perform its parts, in addition to clarifying what are the processes for the organizational machinery to work adequately.

Organizational structure is also key because it determines which individuals can participate in the organization. decision-making and to what extent their opinions and points of view will shape the actions of the business. As each organization is different and aspires to different objectives, the ideal organizational model will depend on Much about the nature of the company, its context, needs, aspirations and adversities for which it is going.

The organizational structure should be reviewed often by business leaders because, as the context and resources can change, it is necessary to ensure that the proposed model continues to help the company achieve its strategic objectives and its mission. As well care must be taken that the processes meet the standards of the sector, in addition to meeting the labor, safety, health and welfare requirements of the workers.

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Characteristics of organizational structures

To work most efficiently, organizations require a formal decision-making, communication, and task-accomplishment system that is according to the needs of the company itself.

We can highlight the following general characteristics of organizational structures.

1. well defined structure

As its name suggests, we are talking about a structure, a model that as such must be well defined. All organizational structure must have an established framework where the hierarchy is defined. The structure must clearly define what each job is within the company, indicating its function, scope and senior management.

So that there is no confusion, the structure must be well documented and easily accessible to all workers, specifying what each one does. Confusion about tasks and roles, or some workers spending time on tasks that are out of their hands, should be avoided as much as possible.

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2. Communication

Naturally, in any company there must be good communication between its parts. A good organizational structure will make it very clear what the communication hierarchy is, indicating how workers communicate with each other depending on the situations. The organizational model describes how tasks are delegated and communicated to workers, how employees keep management updated on their tasks and how and through which channels they can present their complaints or suggestions.

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3. Clear vision

Organizations must have a vision, something that helps them establish the goals and objectives to be achieved. This vision must be clear and concrete during the elaboration of the organizational structure. With her, the values ​​that are defended in the organization are clearly defined, what it wants to achieve and what its moral and ethical limits are. In turn, the vision must be concise, clearly directing where the company is going.

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4. departmentalization

Departmentalization refers to the way in which a company groups various sectors of its organization. Organizational models can bring together different fragments of the organization depending on various aspects, such as their function (sales, marketing, customer service), geolocation (regions, countries, cultural environments), by product, type of market, by client…

5. Chain of command

The chain of command or hierarchy of authority refers to the line of authority of the company, indicating who reports to whom. It refers to the number of subordinate employees over whom managers have authority.

6. Centralization

This feature refers how centralized or decentralized with which the organizational structure has been established. In decentralized companies, responsibilities are diffused in decision-making to lower-level managers and also to some employees. non-managerial, while centralized ones maintain control and decision-making responsibilities near the top of the organization. organization.

What makes an organization more centralized or more decentralized depends on various factors, among them the hierarchical levels of the company itself or the degree to which it is dispersed geographically.

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elements and components

According to Henry Mintzberg, a Canadian academic specializing in business and business management, in organizational structures it is possible to identify a series of general elements, which he explains in great detail in his book "The structuring of organizations" (1979). They are the following.

1. strategic apex

At the top of the organization we find the strategic apex, whose main objective is ensure that the company fulfills its mission and manages its relationship with the environment. Senior management, which could well be considered synonymous with the strategic apex, establishes long-term business strategies and policies with which it is intended to achieve the stated objectives.

2. Middle line

Below the apex, we would find the midline. This is a group of middle managers responsible for convert the general strategic objectives and plans commissioned by the strategic apex into detailed plans, oriented to be put into practice in the form of operational action plans.

Action plans will be carried out by workers, specifying managerial responsibilities for particular tasks and how resources will be allocated. Middle managers are also responsible for monitoring activities and taking action to ensure that resources are used in the most efficient way to achieve the objectives of the business.

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3. Technostructure

The bigger a company gets, the more complex it gets, developing a separate group of people who care about how best to get the job done. these employees specify exit criteria and ensure staff have the right skills. This group is what is known as the technostructure and is made up of key people and teams that work in human resources, finance, training and planning.

4. Support staff

In the company you can also find other administrative functions not directly related to the mission of the organization, such as public relations, coffee shop, counseling. This part of the organizational structure is known as support staff.

In this support staff we would also find people who carry out functions such as research and development, public relations and legal services. Although its products and services do not directly contribute to the core purposes of the organization, its activities improve the efficiency and effectiveness of the strategic apex, the middle line, and the operating core.

5. operating core

The operating core is the bottom of the organization. Is about employees who perform the basic work of producing products or providing services.

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types of structures

We can talk about several types of organizational structure, the main ones being the following.

1. simple organization

Simple organizations have a flexible organizational structure, often driven by leaders with an entrepreneurial and innovative mindset. This model is usually the one you see when a company has just taken its first steps and is still going in diapers, managed by their owners who often exercise their own hands construction site. It has a simple and flat structure, made up of one or a few managers. The organization is informal and unstructured.

Its members have ideals, energy and enthusiasm, factors that motivate them to achieve their goals and maintain their vision of the future. However, it has drawbacks such as the limited structure itself, poor discipline in the task (its workers are often amateurs) and little management control if work processes are not defined with clarity.

As organizations grow, their leaders must make more and more decisions, which can overwhelm them. Therefore, they end up hiring more employees, which makes the structure of the company more sophisticated and increasingly complex.

2. machinery organization

The machine or bureaucratic organization is especially common in government agencies and other types of large corporations. What most defines this type of organization is its high standardization, being the work very formalized and the jobs are clearly defined.

There are many procedures within the company and it is often the case that decision-making is centralized, with functional departments to delegate some tasks.

All functional lines rise to the top, allowing top managers to maintain centralized control. Well set up, these organizations can become very efficient.

3. professional organization

The professional organization resembles the bureaucratic, but characterized by a high degree of professional knowledge. Employees are technically trained to carry out specialized skills autonomously.

Thanks to this, there is a more decentralized decision-making than what is seen in bureaucratic-type organizations. This structure is common in places like universities, law firms, or banks.

Its main disadvantage is the lack of control that senior executives can have over the workers., because authority and power are distributed through the hierarchy.

4. divisional organization

The divisional structure is common in large companies with multiple business units. these corporations divide their businesses and products into divisions to promote sector-specific management. Most commonly, there is centralized control, with divisional vice presidents overseeing all facets of work in each of their divisions.

The main benefit of the divisional structure is that it allows line managers to have more control and responsibility than in the machine structure. However, one of its most important weaknesses is the duplication of activities and resources, in addition, the divisions they can fall into conflicts because each one needs to compete for the limited resources assigned from the top business.

5. adhocracy

The adhocracy is a highly innovative type of organization. In new industries, companies need to innovate and work ad hoc, elaborating solutions specifically elaborated for its most immediate context in order to survive.

The great advantage of adhocracies is that maintain a core pool of talent, from which people can be drawn at any time to solve problems and work more flexibly. Employees often move from one team to another as projects are completed and new ones emerge. Because of this, adhocracies can respond quickly to changes, bringing together experts capable of facing new challenges.

But, it brings with it problems such as conflict, especially when power and authority are unclear. In addition, having to deal with very sudden changes can be psychologically and physically exhausting for workers, stressed by the uncertainty of not having a well-established routine. This makes it difficult to retain talent.