Types of Organizational Structures
Summary
TLDRThe video script discusses various organizational structures and how they impact organizational behavior. It explains the importance of grouping employees based on knowledge, skills, functions, outputs, clients, or locations to achieve organizational goals. The script outlines different structures such as functional, divisional, matrix, team-based, lattice, and network organizations, each having unique characteristics and applications. These structures influence how tasks are allocated, coordinated, and supervised, ultimately shaping the effectiveness and performance of employees, teams, and the organization as a whole.
Takeaways
- 🏢 An organizational structure is crucial for defining how activities are directed towards achieving organizational goals.
- 👥 Employees can be grouped based on their knowledge and skills, which is common in specialized industries like pharmaceuticals.
- 🔧 Grouping by business function, such as HR, marketing, and R&D, is a typical way to organize departments in many organizations.
- 🛠️ Activities-based grouping allows for the creation of departments that focus on specific processes, like different sales channels in real estate.
- 📈 Output-based grouping organizes employees around the products or services they work on, streamlining production and service delivery.
- 👩💼 Client-based grouping structures departments around the types of clients they serve, ensuring specialized attention to different customer segments.
- 🌍 Geographical grouping arranges employees based on the areas they serve, which is beneficial for organizations with widespread operations.
- 🔄 A functional structure groups employees with similar skills or tools into departments, promoting efficiency within specialized areas.
- 🌐 Geographic, product, and market structures are types of divisional structures that help manage large, diverse organizations.
- 📊 Matrix structures involve employees reporting to both a project/team and a functional manager, blending multiple skillsets for project success.
- 💬 Team-based structures permanently assign members from different functions to a team, focusing on long-term projects or products.
- 🔗 Lattice structures form and dissolve cross-functional teams as needed for specific tasks, common in consulting and project-based work.
- 🌐 Network organizations consist of autonomous units that coordinate and control activities as a single entity, often outsourcing non-core functions.
Q & A
What is an organizational structure?
-An organizational structure is a framework that defines how activities such as task allocation, coordination, and supervision are directed towards achieving organizational aims.
Why is it important to group employees in an organization?
-Grouping employees is significant as it impacts organizational behavior and efficiency by aligning individuals based on their skills, tasks, or other relevant factors, which can enhance productivity and goal achievement.
What are the six common bases for grouping employees?
-The six common bases for grouping employees are by employee knowledge and skills, business function, activities, output, client, and location.
How does an organization with a functional structure group its employees?
-In a functional structure, employees are grouped into departments based on their skills or the tools and work processes they use, such as a marketing department for marketing professionals.
What is a divisional structure and how does it differ from a functional structure?
-A divisional structure is a collection of functions organized around a specific geographic area, product or service, or market. It differs from a functional structure by organizing departments around broader categories like geographic regions or product lines rather than specific skills or functions.
Can you explain the concept of a matrix structure in an organization?
-A matrix structure is one where employees report to both a project or product team and a functional manager. It allows for the integration of skills and expertise from different functional areas into project teams.
What is a team-based structure and how does it operate?
-In a team-based structure, performance teams are created with members from different functions who are permanently assigned to a project or product team and do not report to a second functional manager.
How does a lattice structure facilitate organizational tasks?
-A lattice structure involves the formation and dissolution of cross-functional and cross-level sub-teams as needed to complete specific projects or tasks, which is common in consulting organizations.
What is a network organization and how does it coordinate activities?
-A network organization is a collection of autonomous units or firms that act as a single larger entity, using social mechanisms for coordination and control. It contracts out functions that can be done better or more cheaply by outside firms.
Why is the organizational structure important for employees, teams, and the organization as a whole?
-Organizational structure provides the context in which employees, teams, and the organization perform. It influences how tasks are allocated, coordinated, and supervised, which in turn affects overall performance and goal achievement.
Outlines
🏢 Organizational Structures and Their Impact
This paragraph introduces the concept of organizational structures and their significance in directing activities such as task allocation, coordination, and supervision towards achieving organizational goals. It explains that as organizations grow, they must decide how to group employees into sub-units based on various criteria. Six common bases for grouping employees are mentioned: employee knowledge and skills, business function, activities, output, client, and location. These groupings lead to different organizational structures such as functional, geographic, product, market, matrix, team-based, lattice, and network structures. Each structure is briefly described, highlighting how they group employees and their functions within the organization.
Mindmap
Keywords
💡Organizational structure
💡Functional structure
💡Divisional structure
💡Matrix structure
💡Team-based structure
💡Lattice structure
💡Network organization
💡Task allocation
💡Coordination
💡Employee grouping
Highlights
Grouping employees and tasks within an organization significantly impacts organizational behavior and employee performance.
Organizational structure defines how activities such as task allocation, coordination, and supervision are directed toward achieving organizational goals.
As organizations grow, they must decide how to group employees into subunits based on tasks they perform.
Employee knowledge and skills can be a basis for grouping, as seen in pharmaceutical organizations with departments like oncology and genetics.
Business functions, such as human resources, marketing, and research and development, can serve as another basis for employee grouping.
Employees can also be grouped based on the activities they perform, such as in retail where separate teams may handle physical stores and online sales.
Grouping by output means organizing employees around the specific products or services they work on.
Client-based grouping involves organizing employees according to the types of clients they serve.
Location-based grouping organizes employees by the geographical areas they serve.
A functional structure groups employees with the same skills or work processes into departments, such as a marketing department.
A divisional structure is organized around geographic areas, products, or markets, and is common in organizations with diverse products or services.
In a matrix structure, employees report to both a project or product team and a functional manager, blending functional and project-based work.
Team-based structures involve horizontal or vertical teams that manage part or all of the organization, with members assigned permanently to projects.
In lattice structures, cross-functional and cross-level sub-teams form and dissolve as needed to complete specific projects or tasks, common in consulting firms.
Network organizations are a collection of autonomous units or firms that collaborate as a larger entity, often contracting out functions like marketing or payroll.
Transcripts
[Music]
grouping employees and tasks in an
organization has significant impact on
organizational behavior and employees
let's take a look at types of
organizational structures
an organizational structure defines how
activities such as task allocation
coordination and supervision are
directed toward the achievement of
organizational aims
as they grow organizations must decide
how to carve employees into sub units
this usually means grouping people in a
way that somehow relates to the tasks
they perform here are six common basis
for grouping employees
employee knowledge and skills employees
are grouped by what they know for
example pharmaceutical organizations
have departments like oncology and
genetics
by business function employees are
grouped by business function for example
many organizations have departments of
human resources marketing and research
and development
employees are grouped based on the
activities they do for example a realtor
may have a different retail store and
online departments reflecting two
different sales processes
output employees are grouped based on
the products or services they work on
client employees are grouped based on
the types of clients they serve
location employees are grouped based on
the geographical areas they serve
now let's discuss some of the structures
that arise from these different
groupings
a functional structure groups people
with the same skills or who use similar
tools or work processes together into
departments for example a marketing
department is staffed solely with
marketing professionals
a division is a collection of functions
organized around a particular geographic
area a geographic structure product or
service a product structure or market a
market structure divisional structures
are common among organizations with many
products or services geographical areas
and customers
when employees report to both a project
or a product team and to a functional
manager they're working in a matrix
structure
employees represent their function in
their work team which allows the team to
house all of the skills and expertise it
needs to perform effectively and make
good decisions project managers
coordinate the different functional
contributions to the project and are
held accountable for the team's
performance
organizations with a team-based
structure create horizontal or vertical
teams that can define part or all of the
organization
unlike matrix teams in a team-based
structure performance team members form
different functions and are permanently
assigned to the project or product team
and do not report to a second functional
manager
in organizations with a lattice
structure cross-functional and
cross-level sub-teams are formed and
dissolved as necessary to complete
specific projects or tasks this
structure is common in consulting
organizations
a network organization is a collection
of autonomous units or firms that act as
a single larger entity using social
mechanisms for coordination and control
because network organizations contract
out any function that can be done better
or more cheaply by outside firms like
marketing or payroll managers spend a
lot of time coordinating and controlling
the network of contractors and strategic
alliances
organizational structure provides the
context in which employees teams and the
organization perform
[Music]
you
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