🏗️ Types of Organizational Structure
Big Idea: An organizational structure defines how roles, responsibilities and authority are arranged within a business. It determines who reports to whom and how information flows.
Common structures
- Hierarchical (tall) structure -- many levels of management, long chain of command, narrow span of control. Clear authority but slow communication
- Flat structure -- few levels of management, short chain of command, wide span of control. Faster communication but managers may be overloaded
- Matrix structure -- employees work across different teams and projects, reporting to more than one manager. Flexible but can cause confusion over authority
- Divisional structure -- the business is divided into semi-autonomous divisions (by product, region or customer type). Each division operates somewhat independently
A large multinational like DA would likely use a hierarchical structure with functional divisions (marketing, finance, innovation, CSR, HRM, production). Each division had its own director reporting to Pierre, the CEO.
[Diagram: org-structures] - Available in full study mode
[Diagram: org-chart] - Available in full study mode
Tall (hierarchical) structure
- Many management levels between top and bottom
- Long chain of command -- messages pass through many people
- Narrow span of control -- each manager supervises few employees directly
- Clear roles and authority -- everyone knows who their boss is
- More promotion opportunities (many management layers)
- BUT: slow communication, expensive (many managers), can feel bureaucratic
Flat structure
- Few management levels between top and bottom
- Short chain of command -- messages travel quickly
- Wide span of control -- each manager supervises many employees
- Faster decision-making and communication
- Employees may feel more empowered and involved
- BUT: managers may be overloaded, fewer promotion opportunities, harder to control
Exam tip: If asked to 'state features of a hierarchical structure', use these exact terms: tall, many levels, long chain of command, narrow span of control. These are the keywords examiners look for. 🎯