Organization of the Company
Flat organizational structure:
The flat organizational structure is characterized by few or in the extreme case no middle management, so that employees report directly to the top management.
The idea behind the flat structure is that employees will be more productive and engaged when participating in decision-making processes. At the same time, comments, and feedback in connection with decisions will reach the employees faster than in a hierarchical organizational structure. The structure can be more time consuming than the hierarchical one, as decision making processes involve several people.
Only small companies will be able to achieve a completely flat structure, and companies of a cartain size will therefore be forced to introduce one or more levels of management between the employees and the top management.
Advantages of a flat organizational structure:
Disadvantages of a flat organizational structure:
Hierarchical line organization:
A line organization is structured so that every unit in the organization, except the top management, is subordinate to another unit. Thus, the organization has a pyramid shape, with only a single unit, the management, at the top. The larger the company, the more links of middle managers and employees there will be. It also means that the closer to the top of the pyramid the more power and influence, and the closer to the bottom the less.
The hierarchical organizational structure is characterized by high degree of top management of the company and centralization of decision-making competence by the top management. The communication therefore also goes primarily from the management down into the organization and only to a lesser extent the other way.
Advantages of hierarchical organizational structure:
Disadvantages of hierarchical organizational structure:
The formation of departments can lead to:
A matrix organization divides the organization according to two factors: common functions in the company (as the departments purchasing, sales, production, finance, transport) as well as projects or products. Thus, a project team is made up of the project manager, who is responsible for the project, as well as people from the necessary function departments.
Gathering the specialists in joint departments avoids spending unnecessary resources on assigning each project for example A purchasing, sales, and production department. At the same time, a functional specialization is achieved as well as a focus on each individual project. The matrix organization is used in companies where there is a great need for coordination.
Advantages of the matrix organization:
Disadvantages of the matrix organization: