Organizational Structures

1
hat is an Organizational Structure?2
• An organizational structure outlines how
responsibilities and roles are assigned and grouped
throughout an organization.
• It also defines how tasks are divided, coordinated, and
supervised within a company. It specifies the
hierarchy, roles, and responsibilities of employees,
ensuring clarity in communication and decision-
making.
 3
ommon Types Organizational Structure

Team based structure Hierarchical structure

Network structure Functional structure

Process based structure Horizontal or Flat structure

Circular structure Divisional structure

Line structure Matrix structure

Reference : Types of Organizational Structures | Lucidchart Blog

 Hierarchical structure 4

A traditional model with a clear chain of command from top management down to lower levels.

The hierarchical organizational chart is indeed the most common type, visually resembling a pyramid. In this
structure:
• Top Levels: Typically include the CEO or upper management, who set the overall direction and
strategy for the organization.
• Middle Levels: Comprise managers and department heads who oversee specific functions or teams,
implementing the strategies set by upper management.
• Lower Levels: Consist of entry-level employees and operational staff who carry out day-to-day
tasks and report to their immediate supervisors.
This clear chain of command helps establish authority, streamline decision-making, and maintain
accountability within the organization
 Hierarchical structure 5

Pros Cons
• Better defines levels of • Can slow down innovation or
authority and responsibility important changes due to increased
• Shows who each person reports bureaucracy
to or who to talk to about • Can cause employees to act in
specific projects the interest of their department
• Motivates employees with clear instead of the company as a whole
career paths and chances for • Can make lower-level employees
promotion feel like they have less ownership
• Gives each employee a and can’t express their ideas for the
specialty company
 Functional structure 6

A functional structure starts with positions with

the highest levels of responsibility at the top
and goes down from there. Primarily, though,
employees are organized according to their
specific skills and their corresponding function
in the company. Each separate department is
managed independently.
 Functional structure 7

Pros Cons
• Allows employees to focus on • Can create silos within an
their role organization
• Encourages specialization • Hampers interdepartmental
• Help teams and departments feel communication
self-determined • Obscures processes and strategies
• Is easily scalable in any sized for different markets or products in
company a company
 Horizontal or flat 8
structure
• A horizontal or flat organizational structure fits
companies with few levels between upper
management and staff-level employees.
• Many startup businesses use a horizontal structure
before they grow large enough to build out different
departments, but some organizations maintain this
structure since it encourages less supervision and
more involvement from all employees.
 Horizontal or flat 9
structure
Pros Cons
• Gives employees more • Can create confusion since
responsibility employees do not have a clear
• Fosters more open supervisor to report to.
communication • Can produce employees with more
• Improves coordination and speed generalized skills and knowledge
of implementing new ideas • Can be difficult to maintain once
the company grows beyond startup
status
 Divisional structure 10

In divisional organizational structures, a company’s

divisions have control over their own resources,
essentially operating like their own company within the
larger organization. Each division can have its own
marketing team, sales team, IT team, etc. 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.
 Divisional structure 11

Pros Cons
• Helps large companies stay • Can easily lead to duplicate
flexible resources
• Allows for a quicker response • Can mean muddled or
to industry changes or insufficient communication
customer needs between the headquarters and
• Promotes independence, its divisions
autonomy, and a customized • Can result in a company
approach competing with itself
 Matrix structure 12

• A matrix organizational chart looks like a grid, and it shows cross-

functional teams that form for special projects.

• For example, an engineer may regularly belong to the engineering

department (led by an engineering director) but work on a temporary
project (led by a project manager). The matrix organizational chart
accounts for both of these roles and reporting relationships.
 Matrix structure 13

Pros Cons
• Allows supervisors to easily • Presents a conflict between
choose individuals by the needs of department managers and
a project project managers
• Gives a more dynamic view of the • Can change more frequently
organization than other organizational chart
• Encourages employees to use types
their skills in various capacities
aside from their original roles
 Team-based 14
structure
• Team-based organizational structure groups
employees according to teams—like Scrum teams
or tiger teams.
• A team organizational structure is meant to disrupt
the traditional hierarchy, focusing more on problem-
solving, cooperation, and giving employees more
control.
 Scrum Team 15
A Scrum Team is a small (typically 10 or fewer) team of
people that work together, using the Scrum Framework,
to create something valuable. The team consists of:
• A Product Owner who maximizes the value of the
product that results from the work of the Scrum Team
• Developers who create the product
• A Scrum Master who helps the team improve its
practices and effectiveness

Ref: What is a Scrum Team? | Scrum.org

Everyone on the Scrum Team is accountable for certain aspects of the team’s work. The Scrum
Team as a whole is accountable for creating a valuable, useful Increment every Sprint and the
Product Owner, Developers and Scrum Masters each have accountabilities that are specific to
them.
 Tiger Team 16

• A tiger team is a group of experts

brought together to solve a specific
problem.
• Tiger teams disrupt how your
business is typically organized by
putting cross-functional specialists in
the same room—so you can remove
silos and approach critical problems
• from
This type
multiple of teamperspectives.is small and nimble, so the group can act
fast and come up with novel solutions that more traditional
teams couldn’t manage.
https://www.linkedin.com/posts/jonathonhensley_standing-up-tiger-teams-to-tackle-urgent-activity-7091814687746527
32--_xZ/ https://asana.com/resources/tiger-team
 Team-based 17
structure
Pros Cons
• Increases productivity, performance, • Goes against many companies’ natural
and transparency by breaking down silo inclination of a purely hierarchical
mentality structure
• Promotes a growth mindset • Might make promotional paths less
• Changes the traditional career models clear for employees
by getting people to move laterally
• Values experience rather than seniority
• Requires minimal management
• Fits well with agile companies with
Scrum or tiger teams
 Network structure 18

• These days, few businesses have all their services under

one roof, and juggling the multitudes of vendors,
subcontractors, freelancers, offsite locations, and satellite
offices can get confusing.
• A network organizational structure makes sense of the
spread of resources.
• It can also describe an internal structure that focuses more
on open communication and relationships rather than
hierarchy.
 Network structure 19

Pros Cons
• Visualizes the complex web of • Can quickly become overly
onsite and offsite relationships in complex when dealing with lots
companies of offsite processes
• Allows companies to be more • Can make it more difficult for
flexible and agile employees to know who has
• Give more power to all employees final say
to collaborate, take initiative, and
make decisions
• Helps employees and stakeholders
understand workflows and
 Process-based structure 20

• A process-based structure organizes employees into groups or

departments based on steps of a process.

• The leader of the company is listed at the top, as they oversee all
processes.

• Each step of the process has a supervisor and employees who do

work in that process.

• The chart reads from left to right. One process can not begin until
the process before it is completed.
 Process-based structure 21

Pros Cons
• Can lead to faster and more • Can lead to barriers between
efficient processes departments
• Promotes teamwork within • Can lead to miscommunication
departments and across between departments,
departments especially during handoffs
 Circular structure 22

• A circular organizational structure puts leaders of the

organization at the center rather than the top so
they can share information outward rather than pass
it down a chain of command.
• Employees in different departments are also seen as
part of a larger whole rather than siloed off by
department.
 Circular structure 23

Pros Cons
• Promotes the flow of information across • Can cause confusion around who to
the organization report to, especially for new
employees
• Promotes communication and
collaboration between employees and • Can take longer to make decisions
departments
 Line structure 24

• A line structure is one of the simplest

organizational structures as authority flows from
top to bottom.
• Each department is ran by a manager and works
toward a common organizational goal.
 Line structure 25

Pros Cons
• Reporting structure is • Can be inflexible
clear • Can limit innovation and
• Stable environment specialization
• Can lead to managers
having a lot of power
The CxO titles
 The CxO titles CMO - Chief
Marketing CIO: Chief
Officer
• Marketing
Information Officer
activities
• Sales • Technology Assessment
CEO- Chief Executive Officer • Strategic Evaluation
management, •
• Managing the Process Improvement
• Product • Stakeholder
organization,
• Driving its vision and development, Collaboration
strategy, • Advertising, • Change Management:
• Connecting with the • Market research
market,
• Making key decisions
to achieve business
goals.

COO – Chief
Operating
CFO – Chief Officer
Financial
• Daily Operations
• Officerfinancial
Company's
• Business Plan
planning,
• Investment decisions, Execution
• Risk assessment, and • Operational
• Providing strategic Strategy
financial insights to • Policy
enhance overall value. Communication
• Team Development
 Chief Executive Officer 28

As a decision maker, the CEO plays several key

roles:
1. Strategic Direction
2. Resource Allocation
3. Risk Management
4. Leadership and Culture
5. Stakeholder Communication
6. Crisis Management
7. Performance Evaluation
 Chief Financial Officer 29

As a decision maker, the CFO plays several key

roles:
• Financial Strategy
• Data Analysis
• Risk Management
• Capital Allocation
• Stakeholder Communication
• Collaboration
• Performance Metrics
 30
Chief Marketing Officer
As a decision maker, the CMO plays several key
roles
1. Strategic Planning
2. Market Insights
3. Cross-Department Collaboration
4. Brand Management
5. Performance Metrics
 Chief Operating Officer 31

As a decision maker, the COO plays several key

roles
• Execution of Strategy
• Operational Efficiency
• Cross-Functional Collaboration
• Performance Metrics
• Crisis Management
 Chief Information Officer 32

As a decision maker, the CIO plays several key

roles
• Strategic Advisor
• Data-Driven Decisions
• Technology Investment
• Risk Assessment
• Cross-Functional Collaboration
• Change Management Leadership
• Performance Metrics