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9 Types Of Organizational Structure Every Company Should Consider

8 de agosto de 2022

Whether you are starting your first company or you are a dedicated entrepreneur diving into a new venture, Bizfluent is here to equip you with the tactics, tools and information to establish and run your ventures. Corporate hierarchy refers to the arrangement of individuals within a corporation according to power, status, and job function. Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts.

Once you’ve chosen the right org structure to pursue, learn the steps in the company reorganization process. Our team offers valuable advice and assistance to ensure the effective structure of your team. Teams cannot operate optimally if they are not completely sure about processes.

  • Having an organizational structure in place allows companies to remain efficient and focused.
  • This complexity is one of the major disadvantages of a matrix team structure.
  • The main appeal of the matrix structure is that it can provide both flexibility and more balanced decision-making .
  • This model might have multiple teams answering to one person and taking on projects based on their importance and what the team is capable of — rather than what the team is designed to do.
  • A network organizational structure makes sense of the spread of resources.

As mentioned, one of the most significant benefits of the process-based structure is that it increases efficiency and speed. If Department B cannot start its processes until Department A finishes, this compels Department A to work promptly and proficiently. This organizational model also promotes intradepartmental and interdepartmental teamwork. Geographical divisions allow companies the advantage of catering to a specific customer.

As a small business owner herself, she is well-versed in what it takes to run and market a small business. On the flip side, it can be difficult for businesses to scale using this structure. The business is not as efficient when it begins to grow because there can be a duplication of resources in each division. There is no one best organizational structure, as it depends on the nature of the company and the industry it operates in. Not having a formal structure in place may prove difficult for certain organizations. For instance, employees may have difficulty knowing to whom they should report.

Geographic Divisional Org Structure

The main appeal of the matrix structure is that it can provide both flexibility and more balanced decision-making . Similar to a few other structures on this list, process-based structure can erect barriers between the different process groups. This leads to problems communicating and handing off work to other teams and employees. Mobilunity has worked with many companies to help them set up their team structure to better achieve their goals.

If there’s a time when teams in a flat organization disagree on something, such as a project, it can be hard to get aligned and back on track without executive decisions from a leader or manager. Because of how complicated the structure’s design is, it can be tricky to determine which manager an employee should go to if they need approval or an executive decision for something. So if you do choose to have a flat organization, you should have a clearly marked tier of management or path that employers can refer to when they run into these scenarios. From an ideological perspective, a circular structure is meant to promote communication and the free flow of information between different parts of the organization. Whereas a traditional structure shows different departments or divisions as occupying individual, semi-autonomous branches, the circular structure depicts all divisions as being part of the same whole.

type of team structure

Divisions are separated by region, territories, or districts, offering more effective localization and logistics. Companies might establish satellite offices across the country or the globe in order to stay close to their customers.

Geographic Organizational Structure

That also means each and every department can be more productive, as they are likely to be more focused on energy and time. Lucidchart is the intelligent diagramming application that empowers teams to clarify complexity, align their insights, and build the future—faster. With this intuitive, cloud-based solution, everyone can work visually and collaborate in real time while building flowcharts, mockups, UML diagrams, and more.

When trying to create its team structure, XPLG tried to outsource its members, but they ended up with more PMs than developers. What XPLG needed was a distributed team structure, and so they turned to Mobilunity. This is a form of Anti-Type A which is prominent in medium-to-large companies where multiple legacy systems depend on the same core set of data. Because these databases are so vital for the business, a dedicated DBA team, often under the Ops umbrella, is responsible for their maintenance, performance tuning and disaster recovery. The problem is when this team becomes a gate keeper for any and every database change, effectively becoming an obstacle to small and frequent deployments . This topology is borne of a combination of naivety and arrogance from developers and development managers, particularly when starting on new projects or systems.

type of team structure

As daunting and inflexible as mechanistic structure sounds, the chain of command, whether long or short, is always clear under this model. As a company grows, it needs to make sure everyone knows what’s expected of them. Teams collaborating with other teams as needed might help get a business off the ground in its early stages, but sustaining that growth — with more people and projects to keep track of — will eventually require some policymaking. Once you’ve established your chain of command, you’ll need to consider which people and departments have a say in each decision.

By putting the organizational structure in place, the firm can decide salary grades and ranges for each position. A centralized structure has a defined chain of command, while decentralized structures give almost every employee receiving a high level of personal agency. Successful organizational structures define each employee’s job and how it fits within the overall system. If your company doesn’t do everything under one roof, this is a great way to show employees or stakeholders how outsourcing of off-site processes work.

Put road maps, communication funnels and smaller targets in place to ensure smooth workflows. You can either have a manual QA Engineer or engage an automated performance test after creating the software product. Either way, the QA Engineer is in charge of checking the quality of the product and giving helpful feedback.

What Are The Key Elements Of An Organizational Structure?

Functional organization increases efficiency, provides stability, and boosts accountability. It allows departments — with employees who share similar skills and knowledge — to focus on their specialized tasks within their respective fields. Because the roles and responsibilities of this organizational structure example rarely change, department employees can consistently work on similar assignments and hone their skills. A business needs to have an organizational structure in place to be successful.

type of team structure

Outsourcing allows organizations to save money, as they don’t have to bear the expense of setting up a department for the same purpose. It also gives companies the flexibility to change their processes and the ability to focus on their core functions. The elimination of middle management employees defines the flat structure type. Second, it allows staff to build direct relationships with upper management.

A team organizational structure is meant to disrupt the traditional hierarchy, focusing more on problem-solving, cooperation, and giving employees more control. Some organisations, particularly smaller ones, might not have the finances, experience, or staff to take a lead on the operational aspects of the software they produce. The major disadvantage of the flat team structure is that it can be difficult to resolve conflicts when there is no chain of command.

Project Manager

By separating employees and functions into different departments, the company can perform different operations at once seamlessly. Flatarchy, also known as a horizontal structure, is relatively newer, and is used among many startups. As the name alludes, it flattens the hierarchy and chain of command and gives its employees a lot of autonomy. Companies that use this type of structure have a high speed of implementation.

When each area of the business has its own functional departments, the company is able to shorten product-development cycles and reach consumers sooner. It also helps employees to have a high degree of specialization in their respective areas. Four types of common organizational structures are implemented in the real world. This is also referred to as a bureaucratic organizational structure and breaks up a company based on the specialization of its workforce. Dividing the firm into departments consisting of marketing, sales, and operations is the act of using a bureaucratic organizational structure.

The designer creates user-friendly interfaces for the software application and takes care of the branding, usability, design and function of the product. We likely all know this topology is bad, but I think there are actually worse topologies; at least with Anti-Type A , we know there is a problem. It’s useful to look at some bad practices, what we might call ‘anti-types’ (after the ubiquitous ‘anti-pattern‘). The book goes significantly beyond the DevOps Topologies material to cover team interaction patterns, Conway’s Law, cognitive load, and dynamic organization evolution. Williamson, the founder of Transaction Cost Economics, permanently changed how economists and governments view non-market transactions and institutions. Servant leadership is a leadership philosophy in which an individual interacts with others with the aim of achieving authority rather than power.

The organizational structure of a business includes the chain of command in addition to the individual roles and responsibilities of each employee. An example of an organizational structure is a decentralized structure, which gives individuals and teams high degrees of autonomy without needing a core team to regularly approve business decisions. With thousands of products and lines of business, the company structures itself so each business unit operates as its own company with its own president. Alternatively, this type of structure follows an outward flow and contributes to information flowing freely across the business.

One of the biggest advantages of this structure is that it enables the regions to make decisions based on what is best for them. They may have specific market requirements or customer needs, for example. On the downside, this type of decentralization can cause duplication of resources and lack of cohesiveness with the corporate brand. When there are dual reporting structures, one area is primary, and there is a direct line of reporting. The secondary area does not have as much authority as the other line of reporting.

Devops Team Topologies

This is a version of Type 5 but where the DevOps team exists on an ongoing basis with the specific remit of facilitating collaboration and cooperation between Dev and Ops teams. Members of this team are sometimes called ‘DevOps Advocates’, because they help to spread awareness of DevOps practices. This topology might also be called ‘NoOps‘, as there is no distinct or visible Operations team (although the Netflix NoOps might also be Type 3 ). An organizational structure outlines how certain activities are directed to achieve the goals of an organization.


The four types of organizational structures are functional, multi-divisional, flat, and matrix structures. A divisional organizational structure is comprised of multiple, smaller functional structures (i.e. each division within a divisional structure can have its own marketing team, its own sales team, and so on). In this case — a product-based divisional structure — each division within the organization is dedicated to a particular product type of team structure line. In divisional organizational structures, a company’s divisions have control over their own resources, essentially operating like their own company within the larger organization. This structure works well for large companies as it empowers the various divisions to make decisions without everyone having to report to just a few executives. A matrix team structure is unique because the reporting structure is set up as a grid.

Based on the differences in language, culture, and customs one would find across the world, companies cannot necessarily expect the same operations to work in different locations. Not only does it allow organizations to tailor their approach based on geography, but it allows the division to react quickly and efficiently to any geographical market changes. This type of structure is best-suited to organizations that need to be near sources of supply and/or customers (e.g. for deliveries or for on-site support).

It also brings together many forms of business expertise, allowing each geographical division to make decisions from more diverse points of view. The functional structure allows for a high degree of specialization for employees, and is easily scalable should the organization grow. Organic structures (also known as “flat” structures) are known for their wide spans of control, decentralization, low specialization, and loose departmentalization. This model might have multiple teams answering to one person and taking on projects based on their importance and what the team is capable of — rather than what the team is designed to do.

Q: What Are The Roles In The Software Development Process?

If only such teams recognised the importance of Operations as a discipline as important and valuable as software development, they would be able to avoid much pain and unnecessary operational mistakes. Similar to a divisional structure, in this case, the team is organized based on location. Each location, which can be a large geographic region, country or small district, has its own functional departments.

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