The Vertical Organizational Structure

An organizational structure defines the company’s chain of command and work-flow diagrams. This structure is imperative for the smooth functioning of the organization. Organizational structures (OS) are classified into two main types: flat and vertical.

Features

The shape of a vertical organizational structure is very similar to a pyramid. The top management is positioned on the top; below them are the functional managers and the employees come beneath them.

Function

A vertical structure type gels well with large companies. Authority and decision making powers are centralized. All the strategic functions are departmentalized.

Significance

As the scale of operations grows, the size of the organization also grows. It becomes impossible to maintain one supreme line of command. The vertical organizational structure helps when delegating and relegating work and making decisions.

Benefits

With this structure, the responsibilities and authority of every person in the organization is clear. There is no ambiguity on who everyone reports to.

Limitation

Often, a number of unrequited middlemen creep into the system. The organization ends up paying unnecessary salaries. The response times often get prolonged, as every task has to pass through a number of channels for approval.

References

• Purpose of Organizational Structure
• Organizational Structure Types and Design Strategy