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An organizational structure defines the manner in which the company fixes its hierarchies and work flows. Using this structure, the management is able to define the duties, authorities and responsibilities for each job role in the company. The management chooses the company’s organizational structure based on the trade of the company, its long-term goals and vision and the skills and expertise of its employees. Accordingly, it decides on whether it must retain the decision-making authority and powers with the top management or if it must decentralize these functions.

Traditional Structure
This is the easiest structure. This is quite suitable for small organizations with small-scale operations. There are very few commands of hierarchies and authority between the management and the employees. The management gives its employees a free hand and the employees customize the end product as per the tastes and preferences of the customers. Salons, spas, restaurants, hotels and schools use this type of structure. All the employees directly report to the company’s management. As the scale of the company’s operations grows, it becomes very difficult to manage this structure.

Divisionalized Structure
This structure is just the opposite of a traditional structure. Here, there are many levels of command between the employee and the top management. Authority, powers and decision making are decentralized throughout the organization. The company has different departments and divisions for each of its strategic functions. Each department carries out the share of work that is allocated to it. In the end, all the work is collated together to form the organizational work. Every employee and department is concerned with the share of work allocated to them.

Line Structure
This structure clearly defines the authority and responsibility prevailing in the organization. Every individual in the organization knows who reports them and who they must report to for work-related matters. The chain of authority flows downward in the organization and the chain of responsibility flows upward. The organizational chart looks like a pyramid. It is broad at the bottom and narrow at the top.

Matrix Structure
These structures are comparatively new forms of organizational structure. These are more suitable to companies that take on projects for client companies. An employee’s work is monitored and managed by both his immediate boss as well as the project manager. The employee is responsible and accountable to both of them. He needs to carry out his tasks as per the directions of both the superiors. The main glitch is that there is often ambiguity on the lines of work and a lot of time and effort is wasted in duplication.

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