5 Types of Organisation Structures

Functional Organisation Divisional Organisation Matrix Organisation Team Network

1) Aimed to not to replicate specialist 1) A structure that
1) Positions are grouped into work units characteristics, but to focus on a final 1) Employees team members formally 1) Separate often crosses
based on functionality, such as human product through its specialist, type, size, report to multiple leaders and are functions are organizational
resources, finance or operations. location, and customer. simultaneously members of different organized into a boundaries into
2) Departments are grouped by their teams. group focused on a partner or contract
2) Within work groups, positions tend to deliverables, output, or customers served. single objective. organizations.
have similar skills, responsibilities & tasks. 3) A Divisional organization may be grouped 2) Projects by their very nature are
by product, service line or even geography. temporary and are difficult to integrate 2) Cross functional 2) Creates a small hub
Explanation

a) Discipline Based with permanent organisation design. team members of generalists, then a
Favoured by universities,governmental This problem is further exacerbated in contribute to solving network of specialists
laboratories & R&D organisations organisations that tend to manage a single issue. to contribute specific
b) Region Based largely by projects, which usually skills or knowledge
Favoured by large companies produce & involves performing a balancing act 3) This structure when needed.
market their product to different customers between permanent specialist aims to eliminate
in dispersed locations functions and temporary project functional 3) Heavily rely or
c) Product Based structures. boundaries and entirely involve
Favoured by companies have different bring multiple outsourcing tasks
products that might require different perspectives to bear critical to the
production, sales and business strategies to on a single issue. business's main
achieve success in the marketplace objective.
1) May produce high level of a quality 1) Project are easier to facilitate within a 1) Flexibility in system.
product because all the expertise are in division as all components within 2) Encourages inter-organisational 1) Involve exporting
legal liability and
Advantages

the team. organisation are geared to meeting cooperation & teamwork.

2) Make the management by departmental
level easier since each manager is expert
in only a narrow range of skill &
specialisation.
3) Allow the use of current technologies &
state of the art equipment.
1) Different specialist departments often
guard their own expertise. They have their
own objectives & normally are not good at
integrating with other experts. This will
lead to lack of common interests.
2) Lack of communication & 2) Poor communication and inefficient
Disadvantages
manufacturing costs
divisions goal. 3) More efficient use of resources.
of making a product.
2) Promote innovative pursuits in individual 4) Allow project manager to focus on
disciplines because the entire focus of schedule, cost, quality, marketing & 2) May involve
activity is on division. expertise. arbitrage potential.
3) Encourages management development 5) Balanced work load.
of employees. 6) Excellent employee development
1) Projects are vulnerable where they are 1) Careful role definition & clear
required to operate between boundaries of authority framework to prevent conflict.
divisions as inter division rivalry might arise.
2) Tendency of dual reporting caused
by communication problems.

understanding among specialists from information exchange may exist.

different departments.
3) Individual specialist interests are
promoted ahead of project goals & the
potential to disrupt the project cycle is
more likely.
4) Decision making is based on ensuring
functional performance. Projects
operating in a functional environment
require project managers to concentrate
on integrating activities & communication
with specialists.
3) Requires project managers to be aware
of divisional and corporate priorities and
how they may impact projects.
4) High costs due to layers, need for
autonomy or duplicated facilities.
3) Confusion in loyalty.
4) Severe conflicts among managers.
5) Requires good interpersonal skills &
cooperation among managers &
employees.