Write up on Cross Cultural

Human Resource
Management
Types of Organization structure approach

Submitted to: Submitted By:

Ma’am Hoviknu Koinu, Rakovi Rova & Thekrusalie
Asst Professor. Dept of Management Roll No:
Nagaland University NU/MN-13/17, NU/MN-18/17, NU/MN-22/17.
Merima 4TH Sem MBA
Organizational Structure

An organizational structure defines how activities such as task allocation, coordination and
supervision are directed toward the achievement of organizational aims. Organizations need to
be efficient, flexible, innovative and caring in order to achieve a sustainable competitive
advantage. Organizational structure can also be considered as the viewing glass or perspective
through which individuals see their organization and its environment.

An organization can be structured in many different ways, depending on its objectives. The
structure of an organization will determine the modes in which it operates and performs.
Organizational structure allows the expressed allocation of responsibilities for different functions
and processes to different entities such as the branch, department, workgroup, and individual.

Organizational structure affects organizational action in two ways:

1. It provides the foundation on which standard operating procedures and routines rest.

2. It determines which individuals get to participate in which decision-making processes,

and thus to what extent their views shape the organization’s actions.

Approaches to organization structure

1. Entrepreneurial structure

Generally, the small businesses when they are started consist of an owner-manager alone or also
with a few employees. These types of organizations don’t require an organizational chart and
formal assignment of responsibilities. Organization structure is fluid with each employee often
knowing how to perform more than one task and with owner-manager involved in all
aspects/areas of business.

The business growth results in expansion of organizational structure both vertically and
horizontally.

2. Functional Structure

Organizations that group positions by similar roles follow a functional structure. The structure
follows a hierarchical model that includes clearly identified roles, authority and promotional
pathways. Employees in each department fill duties not covered elsewhere in the company,
minimizing an overlap of tasks. You may divide work units by expertise, resources, skills and
activities. For instance, your organization may include production, finance, human resources and
marketing groupings.

3. Product organizational structure

Companies producing more than one product, structure their organizations based on product
structures. Activities are divided on the basis of individual products, product line, services and
are grouped into departments in products in product organization structure. All important
functions viz., marketing, production, finance and human resource are contained within each
department. This types of organization structure overcomes many of the major limitations of
functional organizational structure.

4. Customer-Based Structure

International banks like HSBC, citi bank, and ANZ Banking Corporation structured their
organizations based on customers like Corporate Banking, Small Business banking, institutional
banking, real estate banking and agricultural banking. Chemicals manufacturing companies may
group the customer as industrial customers, educational institutional customer and hospital users.

5. Geographical organizational Structure

MNCs normally operate in various geographical regions and as such geographical structure are
suitable to MNCs. The activities or functions are grouped into departments based on the
activities performed in the geographical areas. Each geographical unit includes all functions
required to produce and market the products in a particular geographical area.

6. Strategic Business unit structure

It is a grouping of business subsidiaries based on some important strategic element common to

each. The common or related elements could be an overlapping set of competitors, a closely
related strategic mission, a common need to compete globally, an ability to accomplish
integrated strategic planning, common key success factors and technologically related growth
opportunities.

7. Matrix Structure

The matrix structure combines the specialization provided by a functional structure and the focus
provided by a divisional structure. Employees are part of teams that connect functional roles with
divisional roles. Each employee belongs to at least two formal groups; one is a functional group,
and the other is a project, product or program team. Employees also report to two bosses – a
functional group boss and a team boss. The structure increases employee motivation and allows
training across functional areas.

8. Team Structure

Team structures organize each function into an objective-based group. Members from each
department work together to solve problems and find opportunities. Employees might be
involved with product development teams or a diversity task force. The team structure can help
remove barriers between departments and foster effective problem-solving relationships. It can
also motivate employees and increase decision-making times.

9. Network Structure

In a network structure, your organization would rely on other organizations to perform important
roles. For instance, you may employ an accountant, website administrator or security personnel
on a contractual basis. You reduce your company's overhead costs because you don't need to hire
as many staff members. But you also lack control in the outcome because you rely on contractual
workers to complete critical work.

10. Line Organizational Structure

Line organizational structure is one of the simplest types of organizational structures. Its
authority flows from top to bottom. Unlike other structures, specialized and supportive services
do not take place in these organizations.

The chain of command and each department head has control over their departments. The self-
contained department structure can be seen as its main characteristic. Independent decisions can
be taken by line officers because of its unified structure.

The main advantage of a line organizational structure can be identified as the effective
communication that brings stability to the organization.

11. Line and Staff Organizational Structure

Most large organisations belong to this type of organisational structure. These organisations have
direct, vertical relationships between different levels and also specialists responsible for advising
and assisting line managers. Such organisations have both line and staff departments. Staff
departments provide line people with advice and assistance in specialized areas (for example,
quality control advising production department). The line functions are production and marketing
whereas the staff functions include personnel, quality control, research and development,
finance, accounting etc. The staff authority of functional authority organisational structure is
replaced by staff responsibility so that the principle of unity of command is not violated.

12. Virtual organizational structure

The widespread use of the outsourcing concept led to structuring the borderless/virtual structure.
Virtual structures do not physically exist but their effect is felt. In other words the relationships
are establish responsibility is discharged operation are performed customers needs are handled
and shareholders enjoy profit or bear loss. And so on without the existence of a structure.
Globalization and information technology have enable large scale outsourcing and as such virtual
structure have become reality.
Virtual organization is a social network in which all the horizontal and vertical boundaries are
removed. It consist of individual working out of physically depressed workspace, or even
individuals working from mobile device and not tied to any particular workspace. It is the
coordination intense structure consisting primarily of patterns and relationship. And this form
needs the communication and information technology to function.