Organizational Reporting Structure
Companies have one of several types of organizational reporting structures, depending on the size and nature of the business. Certain organizational reporting structures also work best in certain industries. Companies sometimes change their organizational structure to increase efficiency.
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Flat Organizational Reporting Structure
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Most small companies with fewer than 15 or 20 employees use a flat organizational reporting structure. The reason: There are usually only one or two people in a department, so fewer reporting levels are needed. Flat organizational reporting structures are less bureaucratic, which enhances communication and speeds up decision-making.
Functional Organizational Reporting Structure
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As a company grows and adds department members, a functional organizational reporting structure becomes more useful. In a functional organizational reporting structure, marketing, brand and other managers usually report to specific directors, the directors report to certain vice presidents, and all the vice presidents report to a president or chief executive officer. Projects are usually divided into certain tasks per department, which higher level managers delegate to subordinates.
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Product Organizational Reporting Structure
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Product organizational reporting structures work best when a company sells many different types of products. Many retail stores use a product organizational reporting structure, according to The-business-plan.com. For example, corporate retail offices often have vice presidents and directors of housewares, home appliances and sporting goods. Each product division has marketing, accounting and sales people reporting to executives within that product division.
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