The vertical, tall or centralized design implements an organizational hierarchy with strong management and subordinate employees. The departmental head has full authority to manage and control of that department.3. I am a mother of a lovely kid, and an avid fan technology, computing and management related topics. With a vertical organizational structure, the emphasis is on the hierarchy. The hierarchical model is the most popular organizational chart type. If the president and other superiors are benevolent in nature, then the employees tend to consider the organization as a family and tend to be closer to each other that is highly beneficial to the organization. The functional organizational concept, originated with Fredrick W. Taylor and it permits a specialist in a given area to enforce his directive within the clearly defined scope of his authority. When the company is growing, it’s easy to increase personnel and add management. It creates a vertical structure where every person within the organization, except one, is a subordinate to another single individual or entity. A functional manager can make decisions and issue orders to the persons in divisions other than his own, with a right to enforce his advice. The staff consists of two types: General Staff: This group has a general background that is usually similar to executives and serves as assistants to top management. Vertical structures are the more common management systems in business, yet horizontal structure is often used within development teams. Such divisions are specially useful for large scale enterprises that are geographically spread out such as banking, insurance, chain department stores or a product that is nationally distributed. Each group of activities is self contained and is independent of other units and is able to perform the assigned duties without the assistance of others. In this case, the units are formed according to the type of product and it is more useful in multi-line corporations where product expansion and diversification, and manufacturing and marketing characteristics of the product are of primary concern. A vertical organization structure is one that relies on managers to command and control their employees' work. The key features of a matrix structure are that the functional and project lines of authority are super-imposed with each other and are shared by both functional and project managers. The ideal thing is to implement a structure which is most suitable to the organizationâs goals. A vertical organization is truly structured. Generally four types of organizational structure are predominant in organizations today. Also, functional units may be so concerned with their own areas that they may be less responsive to overall organizational needs. The organizational structure determines how the organization performs or operates. Prompt decision 4. Below are few of those factors 1. On the other hand, it is a rigid form of organization and there is a tendency for line authority to become dictatorial that may be resented by the employees. the context of a fundamental change in organizational structure which is currently taking place in the way companies view their organizations and the inherent requirements and results. For example, the goal of an organization may be to develop a new automobile. It channels collaboration, specifies modes of coordination, allocates power and responsibility, and prescribes levels of formality and complexityâ (p. 7). A functional organizational structure is a structure that consists of activities such as coordination, supervision and task allocation. 1. For example, a company may need eight product groups, yet have the resources only to hire four marketing specialists. Network structure is built around alliances between organizations within the network. Each unit is placed under a commander and his word is final as far as his subordinates are concerned. Tall and flat organizational structures refer to the structures of an organization’s levels of management. Characteristics of Line Organization structure 1. There’s a clearly defined hierarchy. They include: The first three have been used by US corporations for decades. Functional organizational structure involves structuring an organization around basic business functions such as production and operations, marketing, and finance. A tall organization, or vertical organization, is one in which the CEO sits at the top of the chain of command, with various levels of management underneath. The design principles of organizational structure, as the diagram illustrates, is typically characterized by four dimensions (Galbraith, 2002), as follows: There is no perfect or optimal organizational structure which ideally combines those areas. After completing my post graduation I thought to start a website where I can share management related concepts with rest of the people. A divisional organizational structure is designed so that members of the organization are grouped on the basis of common products or services, geographic markets, or customers served. The disadvantage lies in its rigidity and the length of time needed for information to flow through the organi… One of the disadvantages of the line organization is that the line executives lack specialization. A firm’s organizational structure is the practical manifestation of organizational design elements that influence how various components of the business function and work together. 2. If an organization serves different geographical areas, the division may be based upon geographical basis. Also known as self-contained structures, these departments operate as if these were small organizations under a large organizational umbrella, meeting divisional goals as prescribed by organizational policies and plans. In the structure, each person is supervised by the one directly above him. Specialized Staff: Unlike the general staff who generally assist only one line executive, the specialized staff provides expert staff advice and service to all employees on a company wide basis. It clearly identifies authority, responsibility and accountability at each level. Instead of management driving them, the employees themselves take the reins, working in teams that assume responsibility for projects and programs. The person with the top rank appears at the top of the structure, which is often visualized as a pyramid, with direct reports then coming in descending order as the various company teams are included. In the pure line type set-up, all similar activities are performed at any one level. The grouping is done based on a few factors, hence many models derived from this. This essay illustrates about the organizational structure and the types of organizational structure. In recent times, howeve… They are responsible for accomplishing work on schedule and within the prescribed budget. There is clear unity of command so that the person at each level is reasonably independent of any other person at the same level and is responsible only to the person above him. The decisions are generally decentralized so that the departments guide their own activities. An important aspect of the matrix structure is that each person working on the project has two supervisors – the project manager and the functional manager. 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