Type of Organisation Structure-Know Formal and Informal Structure

Organizational structure refers to the framework that outlines how activities, tasks, and responsibilities are allocated, coordinated, and supervised within an organization. There are several types of organizational structures, each with its own set of characteristics, advantages, and disadvantages. The choice of organizational structure depends on various factors such as the size of the organization, its industry, its goals, and its culture. Understanding different types of organizational structures is essential for effective management, decision-making, and alignment of resources to achieve organizational objectives.

Types of organisation structure is a vital topic to be studied for the commerce examination such as the UGC-NET Commerce Examination.

In this article, the readers will be able to know about the types of organisation structure in detail, along with other related topics in detail.

Defining an Organisation

An organisation can be described as a group of individuals united by a common purpose or goal. It's a platform where people come together, each with their unique roles and responsibilities, to achieve shared objectives.

Exploring Types of Organisation Structures

Organisations can generally be divided into two main categories:

• Formal Organisations: These are organisations in which roles, responsibilities, and authority are clearly delineated. They operate under established policies, rules, procedures, and programs, and decisions are typically made based on these established guidelines. The main purpose of a formal organisation is to achieve specific organisational goals. Formal organisations can be further categorised based on their structure, including:
  • Line Organisation: Also known as Scalar, Military, or Departmental organisation, this is the simplest and oldest form of organisational structure. The chain of command in a Line Organisation flows vertically from the top executives to the lower-level employees.
  • Line and Staff Organisation

• Informal Organisations: Informal organizations, also known as informal groups or networks, are social structures that emerge spontaneously within formal organizations or communities. These informal networks are based on personal relationships, shared interests, and informal communication channels rather than formal organizational charts or official roles.
• Functional Organisation: In a functional organization structure, employees are grouped based on their specialized functions or expertise. Each department or functional area, such as marketing, finance, operations, or human resources, is responsible for specific tasks related to its function.
• Project Organisation: In a project organization structure, teams are organized around specific projects or initiatives rather than functional areas. Each project is temporary and has its own dedicated team with members from various functional areas who work together to achieve project objectives.
• Matrix Organisation: A matrix organization structure combines elements of both functional and project-based structures. Employees report to both functional managers (based on their expertise) and project managers (based on their project assignments), resulting in a dual reporting structure.

Conclusion

Various types of organizational structures exist, each with its own unique characteristics, advantages, and disadvantages. The choice of organizational structure depends on factors such as the size of the organization, its industry, its goals, and its culture. Understanding different organizational structures is essential for effective management, decision-making, and alignment of resources to achieve organizational objectives.

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