Elements of Organizational Structures

Elements of organizational structure include height and span of control.

There are a number of different elements of organizational structures. Some companies structure their organization around products, particularly when products are numerous and diverse. Other companies may develop their organizational structures around customers. A customer-based organizational structure is typically used when a company, like a high tech corporation, has diverse customer groups. Elements of organizational structure can also pertain to size, employee management and job type.

Height

Most organizational structures are depicted with a series of boxes and lines. The boxes represent employees and their positions, while the lines refer to status. For example, lines that run horizontally represent employees of equal rank. Vertical lines represent the height of an organization. For example, a vice president, in a higher box, may have a director reporting to him, with the vertical line separating the levels. Most large companies have numerous vertical lines between positions, each representing bosses and subordinates. Larger companies need more height because of their sales volume and vast number of projects. Contrarily, smaller companies tend to have a flatter organizational structure, as fewer managers are needed.

Span of Control

Another element of organizational structure is span of control. Span of control pertains to the number of people who report to a particular manager. For example, the marketing vice president of a restaurant company may have marketing research, brand, advertising and public relations directors reporting to her. Hence, her span of control is four. The typical company incorporates spans of control throughout the organization. Having people report to a boss helps facilitate communication. Additionally, span of control helps companies better manage projects and meet deadlines.

Function

One of the more common organizational structures is a functional organizational structure. A functional organizational structure divides departments up by functional areas, such as marketing, accounting, and research and development. Companies that use functionally based organizational structures harness employees knowledge, skills and abilities, according to Reference for Business. The synergism of a functionally oriented structure can ultimately lead to better performance. For example, an entire team of advertising professionals will likely be able to develop a better television advertisement than just one advertising employee.

Markets

A market is another element of organizational structure. Companies may develop their organizational structures around specific geographical markets. Market-oriented structures are particularly effective when customers' tastes and preferences vary greatly by region. For example, a consumer products company may decentralize its marketing and finance departments to better serve local markets. Consequently, the consumer products company may assign marketing and finance managers to one of six different regions. A company may also use a market or geographical organizational structure if major clients reside in these areas.

References

• HRM Guide: Organizational Structure
• Reference for Business: Organizational Structure
• Learn Management 2: Flat Structure Organisation