Types of organizational structure

Introduction
• This is essentially the process by which the
organization's mission is divided into discrete
roles and tasks of individuals within the
organization. There are different ways of doing
this. All essentially act initially by grouping key
activities in the organization and then
allocating roles/tasks to individuals.
 These can fall into the following
categories:
• 1) functional
• 2) product/ service
• 3) geographical
• 4) divisional
• 5) matrix
 1. Functional
• 1. Functional - grouping of major functions e.g. contracting,
information, finance, personnel and public health in health
authorities
Advantages
• Increases utilization and co-ordination of groups of people
with technical/specialized expertise
• Increases development and career opportunities for
people in departments
Disadvantages
• Encourages sectional interests and conflicts
• Difficult for organization to adapt to product/service
diversification
 2. Product/Service
• 2. Product/Service - Grouping by service/
product i.e. orthopedic, surgical, psychiatric, etc,
rather than medical, nursing, paramedical, hotel
services (functional).
Advantages
• Increases diversification
• Adaptability increased if service/ product
requires technical knowledge or large equipment
Disadvantages
• Encourages service conflicts
 3. Geographical
• 3. Geographical - a nationalized service develops
regions, areas or district health authorities.
• e.g.\Primary Care Trusts, Strategic Health
Authorities
Advantages
• More responsive to local/ regional issues and
different cultures, national/ state laws etc
Disadvantages
• can lead to localities/ regions conflicting with
each other
 4. Divisional
• 4. Divisional - Grouping of services and/ or geography
and functionality (but with functions such as finance,
personnel, planning retained at headquarters) suitable
for international companies who are highly diversified,
working in more than one country
• e.g. pharmaceutical company with divisions in each
country producing and marketing products developed
by parent company.
Advantages
• Corporate strategic control with production and
marketing independence at divisions
 5. Matrix
• 5. Matrix - Grouping of projects and functions, e.g. NASA (highly complex
industries), Primary Care Trusts (PCTs)
 More than one critical orientation to the operations of the organization
 Need to process simultaneously large amounts of information
 Need for sharing resources
Advantages
• 1) Combines vertical and lateral lines of communication and authority
• 2) Stability and efficiency (of mechanistic structure) with flexibility and
informality (of inorganic structure)
• 3) Emphasizes project aims are all-important
Disadvantages
• 1) Potential conflict between project leader and functional leader regarding
resources
• 2) Project may be jeopardized (பாதிக்க) if project members as well as leaders
enter the conflict on opposite sides
• 3) Does not tolerate diversification well
EXAMPLE OF A MATRIX STRUCTURE