1. Forms of Organizational Structure
Bureaucratic structure
A management system based on a formal framework of authority that is carefully outlined and precisely followed
Characteristics
A high level of job specialization
Departmentalization by function
Formal patterns of delegation
A high degree of centralization
Narrow spans of management, resulting in a tall organization
Clearly defined line and staff positions
Advantages
Inflexibility helps ensure fair and equitable treatment
Disadvantages
Inflexibility creates problems in adapting to dynamic business environments
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2. Forms of Organizational Structure (cont’d)
Matrix structure
A structure that combines vertical and horizontal lines of authority, usually by superimposing product departmentalization on functional departmentalization
Authority flows both down and across
Employees on cross-functional teams report to both the project manager in charge of the team and to their superiors in their home-base functional department
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3. A Matrix Structure
Source: Ricky W. Griffin, Management, 9th ed. Copyright © 2008 by Houghton Mifflin Company. Adapted with permission.
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4. The Matrix Structure (cont’d)
Advantages
Added flexibility
Increased productivity
Higher morale
Increases in creativity and innovation
Personal development of team members
Disadvantages
Chain of command conflicts
May take longer to resolve problems and reach solutions
Personality clashes
Poor communications
Undefined individual roles
Unclear responsibilities
Difficulty in determining how to reward individual and team performance
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5. Forms of Organizational Structure (cont’d)
Cluster structure
An organization that consists primarily of teams with no or very few underlying departments
Also called “team” or “collaborative” structures
Teams may move on to other projects or individual members may be reassigned to different teams and projects
Strengths
Small teams allows for flexibility to change direction quickly and try new things
Weaknesses
Employees may be concerned about job security
Increased stress due to rapid changes
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6. Forms of Organizational Structure (cont’d)
Network structure (virtual organization)
An organization in which administration is the primary function performed and most other functions such as engineering, production, and marketing are contracted out to other firms
Strength
Flexibility allows the organization to adjust quickly to changes
Weaknesses
Difficulty controlling the quality of work by other organizations
Low morale and high turnover of hourly workers
Vulnerability of relying on outside contractors
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