What Are the Roles & Functions of Organizational Structures?

Corporate headquarters accommodate the organization's executive leaders.

Organizational structures organize employees into systems such as departments, offices and hierarchies. Successfully executed structural systems offer a means for employees to communicate and cooperate. Organizational structures also provide control, because the company hierarchy names executives, department heads, managers, supervisors and other leaders. Different kinds of organizational structures exist to meet the demands of various types of businesses. Some companies alter their structure to aid in the transition to modern, communications technology-driven commerce.

Traditional Organizational Structures

Many businesses use previously established organizational structures, created in the traditions of long-standing corporations. One type is the simple organizational structure, which refers to a business in which the owner or owners are in the top position, directly dictating to all other employees. Small businesses often use simple organizational structures. On the other hand, larger businesses may use functional organizational structures that divide the employees into groups depending on their individual job responsibilities. Examples of functional groups include marketing, finance or human resource departments. Each functional group has a supervisor who reports to the business owners or executives.

Corporate Headquarters

Sizable multi-business and multinational corporations often use a corporate headquarters as part of the organizational structure. Executives in corporate headquarters oversee the functions of individual business offices throughout the country or world. Management in corporate headquarters allocates resources to other branches and creates strategic plans for the heads of other offices to implement. Leaders from the organization's various outposts meet with executives in corporate headquarters for job evaluations and strategic direction.

Restructuring

Occasionally, executives find it necessary or prudent to change the organization's structure. The process of restructuring can be complex, but the result is often a better functioning company. During restructuring, executives streamline the organization by removing or combining departments and offices. Logistics, routine communication and resource distribution may all change during the restructuring. In some cases, the staff needs to be reduced in size. This is called downsizing and results in mass layoffs.

Contemporary Organizational Structures

The changing business world has resulted in several contemporary structures. One is the virtual organization, which functions as an elaborate network of employees consulted virtually, cooperating using information technology. The modular structure is another modern structure. Organizations using modular structures outsource temporary work or piece work to contract employees. Many organizations are both virtual and modular. Boundary-less organizations may have traditional structures, but use information technology to provide completely open, transparent communication between all levels of management and employees. This is thought to encourage individual employee growth and companywide innovation. Business with "learning" structures focus on using the organizational structure to enable knowledge-building experiences.

References

• Harvard Business School; How to Make Restructuring Work for Your Company; Stuart C. Gilson; October 2001
• "Strategic Management, 11th Edition"; John A. Pearce et al.; 2009
• Organizational Structure and Designs With Case Study: Types of Organizational Designs

Resources

• Enotes: Organizational Structure
• Harvard Business School: International Differences...; David Collis; January 2010