Organizational Structures and Corporate Cultures

This text discusses the internal factors that affect how organizational structures are designed. These structures are important to managers because they establish lines of formal authority and configure other reporting arrangements. One thing to remember is that the industry type influences the chosen structure. The text also considers the system approach and examines how the internal dimensions of the firm, such as leadership and culture, change in response to the external business environment. Note that the organizational alignment is not set in stone permanently. It will change in response to the external business environment from time to time.

Organizational Designs and Structures

Glossary

Organizational structures

A broad term that covers both mechanistic and organic organizational structures.

Mechanistic organizational structures

Best suited for environments that range from stable and simple to low-moderate uncertainty and have a formal “pyramid’ structure.

Horizontal organizational structures

A “flatter” organizational structure often found in matrix organizations where individuals relish the breath and development that their team offers.

Organic organizational structures

The opposite of a functional organizational form that works best in unstable, complex changing environments.

Functional structure

The earliest and most used organizational designs.

Divisional structure

An organizational structure characterized by functional departments grouped under a division head.

Matrix structure

An organizational structure close in approach to organic systems that attempt to respond to environmental uncertainty, complexity, and instability.

Geographic structure

An Organizational option aimed at moving from a mechanistic to more organic design to serve customers faster and with relevant products and services; as such, this structure is organized by locations of customers that a company serves.

Networked-team structure

A form of the horizontal organization.

Virtual structure

A recent organizational structure that has emerged in the 1990’s and early 2000’s as a response to requiring more flexibility, solution based tasks on demand, less geographical constraints, and accessibility to dispersed expertise.