Types of organisational structure models

Organisation by system/function

-the business is split into specialist areas which operate together to make the business function efficiently

-finance, marketing, HR production has a specialist who can concentrate on what they do best

-there can be a tendency for each department to operate as a separate entity- competition

Organisation by product

-each product has its own department

-easier to see which products perform the best

-conflict due to competition

Organismic (horizontal or flat) structure

-flat and has a large span of control

-each manager is responsible for a large number of subordinates

-democratic leadership

-faster communication

-little or no progress

Mechanistic(vertical or tall) structure

-smaller span of control, less democratic

-motivation via promotion

-slow communication

Centralised or entrepreneurial structure

-autocratic leaders who want to keep form control of the business

-leader is involved with everything

+decisions quick

-decisions are made without the benefit of local knowledge

Decentralised structure

-each product has it own structure

-span of control is wide

-democratic

+local areas are better informed for some decisions

-consumers may not recognise the corporate identity as regions introduce variations

Matrix organisation structure

-where employees with similar skills are put together to complete tasks but with more than one manager supervising

+effective communication

-takes time