Organizational Structure Overview

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Questions and Answers

What is the primary purpose of an organizational structure?

To create a hierarchical system of command

To establish transparent relationships between departments and provide clarity to employees (correct)

To promote teamwork and department loyalty

To restrict innovation and create bureaucracy

What is the most common type of organizational structure?

Functional structure

Hierarchical structure (correct)

Flat structure

Matrix structure

What is a benefit of a hierarchical structure?

Fostering employee development and promotion opportunities (correct)

Reducing the need for clear lines of authority

Promoting innovation and creativity

Limiting collaboration between departments

What is a potential disadvantage of a hierarchical structure?

Limiting collaboration and restricting innovation Signup and view all the answers

In a functional structure, how is the organization typically divided?

By roles, responsibilities, or specialties Signup and view all the answers

What is the purpose of an 'org chart' in an organization?

To visually explain the company's reporting and accountability structure Signup and view all the answers

What is a characteristic of a hierarchical structure?

Multiple levels of authority with the highest level of leadership at the top Signup and view all the answers

Why is an organizational structure important for employees?

It establishes clear lines of authority and goals Signup and view all the answers

What is a benefit of a functional structure?

Establishing clearly defined roles and expectations Signup and view all the answers

Which type of organizational structure is typically used by large, multinational organizations?

Matrix structure Signup and view all the answers

What is a potential disadvantage of a functional structure?

Creating barriers, or silos, between functions Signup and view all the answers

What is a characteristic of a flat organizational structure?

Most middle-management levels are removed Signup and view all the answers

What is a benefit of a matrix structure?

Fostering a balanced decision-making process Signup and view all the answers

What is a potential disadvantage of a matrix structure?

Creating confusion about authority Signup and view all the answers

Which type of organizational structure is often used by small companies and early-stage start-ups?

Flat structure Signup and view all the answers

What is an advantage of a flat organizational structure?

Employees are given more responsibility and decision-making power Signup and view all the answers

Study Notes

Organizational Structure

An organizational structure outlines the hierarchy within an organization, describing roles, responsibilities, and lines of command to achieve business goals.

Types of Organizational Structures

There are 10 types of organizational structures commonly used by businesses, each with pros and cons.

Hierarchical Structure

In a hierarchical structure, employees are grouped and assigned a supervisor, with multiple levels of authority.
Benefits: clearly defined levels of authority, promoting teamwork and department loyalty, fostering employee development and promotion opportunities.
Disadvantages: limiting collaboration, restricting innovation, creating bureaucracy.

Functional Structure

In a functional structure, the organization is divided into groups by roles, responsibilities, or specialties.
Benefits: establishing clearly defined roles and expectations, facilitating improved performance and productivity, allowing for skill development and specialization.
Disadvantages: creating barriers between functions, limiting employees' communication and knowledge, inhibiting collaboration and innovation.

Matrix Structure

The matrix structure resembles a grid, with employees reporting to more than one manager.
Benefits: enabling a flexible work environment, fostering a balanced decision-making process, promoting open communication and shared resources across the business.
Disadvantages: creating confusion about authority, tracking budgets and resources can be difficult, limiting efficiency.

Flat Structure

In a flat organizational structure, most middle-management levels are removed, giving employees more responsibility and decision-making power.
Benefits: increased productivity, suitable for small companies and early-stage startups.
Note: Also referred to as a "horizontal structure."

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Description

Learn about the hierarchy and roles within an organization, and how it helps achieve business goals. Understand the importance of clear relationships between departments and its impact on employee focus and efficiency.