Organizational Structure of a Major Business

Organizational structure is the means by which a company divides itself into functional or hierarchal groups in order to get work done. There are a number of standardized forms that a company can follow, mix or modify.

Functional Structure

Perhaps the most common structure is functional, in which centralized executives oversee divisions based on their function: accounting, manufacturing, sales, customer service, etc.

Divisional Structure

In companies with multiple product lines, divisional structure may allow each product to act as its own mini-business, with its own accounting, marketing and so on.

Matrix Structure

A combination of functional and divisional structures, this takes the traditional functional groups and assigns people within it to a specific product or project.

Centralization

Highly regimented or autocratic businesses have a command-and-control structure in which decisions are passed down from a single office through layers of executives and managers to the workers.

Decentralization

In industries that require creativity and highly skilled workers, these workers are given a great deal of decision-making authority and there are few layers of management between them and top executives.

References

• ManagementHelp.org: Legal Forms and Traditional Structures of U.S. Business Organizations
• Enotes.com: Organizational Structure