What Best Organizational Structure would be?

What Best Organizational Structure would be?

An organizational structure is a hierarchical concept of subordination and defines how job tasks are formally divided, grouped and coordinated. Most common organizational designs that are found in use are simple structure, the bureaucracy and the matrix structure.

The Simple Structure

The simple structure is a "Flat" organization, it usually contain two or three verticals levels of hierarchy, a slack body of employees and one individual in whom decision making authority is centralized. The simple structure is not elaborated and mostly practiced in small organizations where manager and owner are one and the same. It has relatively small degree of departmentalization, wide spans of control, authority controlled by one person and little formalization. The strength of simple structure is that it is fast, flexible and inexpensive to maintain and having clear accountability but its weak point is that it is only applicable in small organizations.

The Bureaucracy

As the name shows, bureaucracy means Standardization of whole process. The bureaucracy system is characterized by highly routine operating tasks achieved through specialization, formalized rules and regulations, grouped tasks, centralized authority and grouped decision making. Mostly people take bureaucracy in negative sense but it means a standardized process of acts in highly efficient way. It allows operations with high formalization which allows centralized decision making. The strength of this system is its formalization but its weakness is that this system strictly follows rules and hardly gives any room for modification.

The Matrix Structure

Another popular organizational design structure is matrix structure that is a combination of two forms of departmentalization, functional and product departmentalization. The most obvious characteristic of the matrix is that it breaks unity of command concept. The strength of this system is its coordination facility when the organization has multiple complex and interdependent activities. When organization grows larger, its information process becomes overloaded but direct contact between different managers makes communication better and flexible. This system also allocates efficient specialists but like all systems it also bears some disadvantages. The major demerit of this system is the confusion it creates, which puts stress on individuals. It is frequently unclear who reports to whom and this creates ambiguity which often leads to confusion.

These are organizational options which are present in several organizations but managers are working since decades to develop new organizational designs that can better help their firms to compete effectively. For example, team structure, pizza structure, network structure and so on.

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