Modern Organizational Structure

Organizational structure refers to an organization's inner framework, and indicates how people and tasks are arranged within it. There are several different modern approaches to how an organization should be structured.

Functional Organization

In a functional organization, employees are grouped together into departments by functional area and skill similarity. Functional organizations benefit from clear lines of authority, but can also suffer from poor communication and coordination losses across functions.

Project-Based Organization

The project organizational structure is a team-based design wherein employee tasks and reporting relationships are coordinated across departments. This type of structure benefits from the combined input of team members from several different areas within the organization. However, project-based organizations may be at a stability disadvantage when the project ends.

Matrix Organization

A matrix organization blends the best features of the project structure and the functional structure. This type of structure maximizes communication and coordination within the organization, but also blurs the lines of role responsibility.

Considerations

There is no one-size-fits-all format. An organization's structure should be based on the needs and strategic goals of the company it is serving.

References

• CM Guide: Project Organization Types
• FAO: Structure of an Organization