Forms of organisation
From CEOpedia | Management online
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Forms of organization refer to the structure of relationships and tasks within a group. This structure can be hierarchical, flat, divisional, networked, or matrix. Hierarchal organization is top-down, with the most senior member in charge and authority delegated down the chain. Flat organization is less structured and more collaborative, with fewer layers and less emphasis on rank. Divisional organization is organized into departments or units based around a specific function or purpose. Networked organization is based on relationships with external partners and stakeholders. Matrix organization combines features of divisional and hierarchical structures, with tasks grouped around both functions and projects.
Example forms of organisation
- Hierarchal organization: This type of organization is commonly used in large businesses and corporations. It involves a chain of command in which decisions are made and authority is delegated from the top level of management down through various levels of subordinate staff. For example, in a large company, the chief executive officer (CEO) is at the top of the hierarchy and has the final say on all decisions.
- Flat organization: This type of organization is becoming increasingly popular as companies strive for greater efficiency and agility. It involves fewer layers of management and less emphasis on rank and authority. Decisions are made more collaboratively and with less bureaucracy. For example, a startup company might have a flat organizational structure in which all employees are on an equal footing and are able to contribute to the decision-making process.
- Divisional organization: This type of organization groups staff into departments or units based around a specific function or purpose. Each department has its own goals and objectives, but is still under the overall control of the management team. For example, a large retail store might have separate divisions for marketing, sales, operations, finance, and human resources.
- Networked organization: This type of organization is becoming increasingly popular as companies look to build partnerships and alliances with external stakeholders. It involves forming relationships with other parties, such as suppliers, customers, and industry experts, to create a network of relationships that can be leveraged for mutual benefit. For example, a company might form a network with its suppliers to share resources and knowledge, or it might partner with customers to develop new products or services.
- Matrix organization: This type of organization combines elements of both divisional and hierarchical structures. It involves grouping tasks around both functions and projects, allowing for greater flexibility and agility. For example, a software development team might be organized into a matrix structure, with tasks grouped by both development team and project. This allows the team to be responsive to the needs of both the project and the company as a whole.
Best practices of organisation
- Communication: A key element of any form of organization is effective communication. This means encouraging open and honest dialogue between all levels of staff and providing clear, concise instructions and feedback.
- Responsibilities: All roles and responsibilities should be clearly defined and communicated, so that everyone knows their role and how it relates to the overall project goals.
- Accountability: Everyone should be held accountable for their own tasks and performance, and there should be an effective system of feedback and rewards for successful completion of tasks.
- Leadership: A strong leadership team is essential to ensure the successful completion of projects. Leadership should be distributed, with clear objectives and decision-making authority.
- Flexibility: The structure of the organization should be flexible enough to accommodate changing needs and objectives over time.
- Processes and Procedures: There should be clear and consistent processes and procedures in place to ensure that project goals are met efficiently and effectively.
- Collaboration and Cooperation: Collaboration and cooperation between all members of the team is essential for successful completion of any project.
Types of forms of organisation
Forms of organization refer to the structure of relationships and tasks within a group. There are various types of forms of organization, including:
- Hierarchal organization, which is top-down, with the most senior member in charge and authority delegated down the chain;
- Flat organization, which is less structured and more collaborative, with fewer layers and less emphasis on rank;
- Divisional organization, which is organized into departments or units based around a specific function or purpose;
- Networked organization, which is based on relationships with external partners and stakeholders; and
- Matrix organization, which combines features of divisional and hierarchical structures, with tasks grouped around both functions and projects.
Steps of organisation building
- Establishing the organization's mission and goals: This is the first step in creating a form of organization and involves determining the purpose and intended outcomes of the organization.
- Identifying roles and responsibilities: This involves identifying the positions that need to be filled and the tasks that need to be done. It also involves assigning roles and responsibilities to individuals or teams.
- Establishing a hierarchy of authority: This involves determining the chain of command and the reporting structure. It also involves assigning roles and responsibilities to individuals or teams.
- Developing communication protocols: This involves creating policies and procedures for how information is shared within the organization. It also includes creating formal methods of communication, such as email and meetings.
- Setting performance standards: This involves setting standards for how tasks should be performed and how goals should be achieved. It also includes establishing metrics for measuring performance.
- Implementing policies and procedures: This involves creating and enforcing guidelines for how the organization will operate. It also includes creating accountability measures.
- Evaluating performance: This involves regularly assessing the organization’s performance and taking corrective action when necessary. It also includes measuring progress towards the organization's goals.
Advantages of forms of organisation
Forms of organization can provide a number of advantages, such as improved efficiency, better communication, and greater flexibility.
- Hierarchical organization can provide a strong sense of structure and clear lines of authority, allowing for effective decision-making.
- Flat organization can encourage collaboration, creativity, and innovation among employees, as the focus is less on rank and more on relationships.
- Divisional organization can promote specialization and expertise, allowing employees to develop greater knowledge and skill in their specific field.
- Networked organization can foster greater access to resources, contacts, and expertise from external partners, allowing for more informed decision-making.
- Matrix organization can help to balance the need for specialized knowledge with the need for cross-functional collaboration and cooperation.
Limitations of forms of organisation
Forms of organization can be useful in creating a structure that allows a group to achieve its goals, but they also have some limitations. These include:
- Inflexibility in responding to change: Hierarchical and divisional organizations can be rigid and slow to adapt to changing situations.
- Limited creativity: Flat organizations can lack the structure needed for creativity to thrive, and divisional organizations can be too specialized for certain types of innovation.
- Poor communication: Matrix organizations can suffer from a lack of communication between departments, and networked organizations can have difficulty coordinating across multiple external partners.
- Misalignment of goals: Hierarchical organizations can be prone to a lack of alignment between the goals of different departments and levels, and divisional organizations can have difficulty adapting to changes in the external environment.
In addition to the main forms of organization, there are several other approaches that can be used to shape the structure of a group. These include:
- Holacracy, which is a distributed authority structure that decentralizes decision-making and encourages self-organization.
- Sociocracy, which is a system of governance based on organizational circles that emphasize the participation of all members in decision-making.
- Agile, which is an iterative approach to project management that focuses on flexibility, collaboration, and continuous improvement.
- Lean, which is a method of waste reduction and process improvement that emphasizes efficiency and value.
- Scrum, which is an approach to project management that focuses on self-organizing teams and frequent feedback loops.
In summary, there are many approaches that can shape the structure and relationships within a group, from more traditional hierarchical structures to newer, more agile methods such as Holacracy, Sociocracy, Agile, Lean, and Scrum.
Suggested literature
- Pettigrew, A., Massini, S., & Numagami, T. (2000). Innovative forms of organising in Europe and Japan. European management journal, 18(3), 259-273.
