ORGANIZATION

STRUCTURE
AND ITS EMERGING
BY
TRENDS
UDAY KANOJIA SAKSHAM
JAIN
What is an Organization Structure
??
• An organization structure denotes the authority and responsibility
relationships between the various positions in the organization by
showing who reports to whom. It is a set of planned relationships
between groups of related functions and between physical factors
and personnel required for the achievement of organizational goals.

• Organization involves establishing an appropriate structure for the

goal seeking activities. The structure of an organization is generally
shown on an organization chart or a job-task pyramid. It shows the
authority and responsibility relationships between various positions
in the organization. According to Argyris, organizations are usually
formed to satisfy objectives that can best be met collectively.
 TYPES OF
ORGANIZATIONAL
STRUCTURE
 1) Functional Structure

This is the most common type of organization structure. It is

divided into different departments based on function. Every
department has a functional manager and a specific number
of employees. Since the division is based on the function, each
department is able to streamline activities based on that
function and ensure maximum efficiency. Communication
flows via the department heads to the top management. For
instance, the departments will be divided into the Sales
Department, Purchases Department, Human Resources
Department etc. Normally, this type of structure is well suited
to small and medium-sized businesses.
2) Divisional Structure 
Here, the employees are divided into various segments of a
particular product, service or market. Every divisional
unit has a functional structure comprising sales,
marketing, human resources, etc. Large enterprises often
implement this kind of organizational structure. It is ideal
for organizations with multiple products and can help
shorten product development cycles.
 3) Flat/Horizontal Structure
In this, the levels of leadership are relatively lesser. The idea
behind it is that employees are less stressed when there are
lesser hierarchical pressures, thus enabling them to work
freely. Since most levels of middle management are
eliminated, employees are able to take decisions in a faster
and more efficient manner. It also makes them feel a lot more
involved in the business as their inputs and ideas are
encouraged and often considered, which in turn boosts
productivity and fosters a healthy work environment. Start-
ups and small companies (early stage) tend to adopt this
structure.
 4) Matrix Structure
It is a hybrid hierarchical structure wherein the employee has to
report to a functional manager as well as a project manager. The
lines of communication flow both horizontally as well as vertically.
Therefore, it facilitates the pooling of resources. The advantage
from the employees’ point of view is that they are able to widen
their skillset since they are assigned to various projects that enable
them to gain invaluable experience as well as knowledge and skill
in previously untapped areas. The matrix structure provides a more
balanced approach to decision-making since there are two chains
of command rather than one.
WHAT ARE THE BENEFITS OF
ORGANIZATIONAL STRUCTURES?

• Faster decision making

• Multiple business locations
• Improved operating efficiency
• Greater employee performance
• Eliminates duplication of work
• Reduced employee conflict
• Better communication
 21st CENTURY ORGANIZATIONAL TRENDS

GLOBALIZATI
ON
MNC’s and TNC’s are all the results of
globalization. Companies today want to expand
their operations globally. They want to have
access to many different markets in different
countries, which enable them to enlarge their
domain and to spread risks about a larger
customer potential. In multinational
corporations of the 21st century, manufacturing
and sales offices are spread across the globe.
The exponential growth of truly global
organizations, or globalization, has been a huge
trend over the past century. The key benefit of
global organizations is the ability to exploit
regional differences in customers’ needs and
production capabilities, such as worker
expertise, costs, government aid and so forth.
 TECHNOLOGY
•  If the current wave of globalization has been the driving
force behind the most far-reaching and powerful changes
in business, then information technology has indisputably
been the facilitator. 

• Drawing attention to the fact that four out of the top five
companies in Businessweek's annual list of most innovative
companies are technology-driven businesses, Professor
Teresa Amabile writes in Working Knowledge, Customers
are courted and supply chains are managed via websites,
social media, and email; marketing, manufacturing, and
distribution processes are managed by sophisticated real-
time information systems; colleagues working 12 time
zones apart can see and hear each other as they work at
their desks-or in airport lounges on opposite sides of the
planet.
 DIVERSITY

The global workforce is more heterogeneous in the 21st

century: sexually, racially, culturally, and individually.
Global companies hire employees with different
backgrounds and nationalities, which fosters the
learning process and helps in enhancing the
performance of the company by taking the best of all
the worlds. However, diversity is considered both a
supporting factor of innovation, and a source of
conflicts. Management and employees need to cope
with different styles of interacting, dressing,
presentation, and physically appearance in a
multicultural company.

For example, Microsoft is committed to diversity for

better performance.
 FLEXIBILITY

Flexible organizations are the ones in which

organization systems, processes, and people
are able to respond differently to different
situations. By being flexible, the
corporations have fewer detailed rules,
greater autonomy, and special job schedules
for mothers, and women. The corporations
have been able to save huge amounts by
letting the employees to decide the working
schedules, working from home, job sharing
and paying according to the skills.
For example, Google allows its employees
to bring their pets at the workplace.
 FLAT
• Organizations in the 21st century are becoming
more flat and the levels in the hierarchy are
disappearing. Communication is fast in flatter
structures and the chances for delays in
communications are very low in this structure.
This structure helps the company for speedy
exchange of information and cost reduction.
Better communication between management and
workers, less bureaucracy, easier decision-
making and better team worker are few of the
advantages of the flat structure. The
disadvantages of flat organizations are : workers
may have more than one manager/boss, hinder
the growth of the organization, structure is
limited to small organizations such as For example, Google has a flat
partnerships, co-operatives and some private organization structure with no
limited companies and function of each hierarchies. Every employee and
department/person could be blurred and merge important and wears several hats.
 QUIZ
Restricted view of organizational goals is represented by deploying a
Vertical Structure
Divisional Structure
Horizontal Structure
Functional Structure
Answer - D
MCQ: Shared task division is encouraged at
a) Linear structure
b) Vertical structure
c) Horizontal structure
d) Compound structure
Answer - C
MCQ: Managers not having control over many activities is a drawback of
a) Matrix Structure
b) Network Structure
c) Vertical Structure
d) Horizontal Structure
Answer - B
MCQ: Specialized task division takes place at
e) Computed structure
f) Vertical structure
g) Complex structure
h) Horizontal structure
Answer - B
• MCQ: An organization designed for efficiency, emphasizes
on
• Centralization
• Horizontal communication
• Decentralization
• Vertical communication
• Answer - D