Organizational structure describes a system that describes hierarchy and authority in a company ( Lee, Kozlenkova, & Palmatier, 2015) . An organizational structure is defined by the service type and objectives. Moreover, it identifies each role, its responsibilities, and where the role will report to within the company. Therefore, an organizational structure assists an organization to achieve its objectives and goals. In a small business where there is frequent face-to-face communication, a formal organization structure may be unnecessary but in large companies and multinationals, decisions regarding delegation of duty are essential. The essay will explain how service types affect the four organizational structures: functional, divisional, matrix, and flatarchy structures.
Functional structure is the most common organizational structure. The structure mainly exists where the services in the company are divided into small groups and each role assigned to a specific group of people. For instance, it could have a group of people working in finance, another group in information technology while another group focuses on marketing ( Shafritz, Ott, & Jang, 2015) . The head of each specialized group reports to a manager or executive within the organizational structure. The structure ensures that workers are grouped according to function and skill set so that they can focus their collective energies towards achieving company goals.
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Service type also affects divisional organizational structure. In companies that provide a variety of services or products that are completely different, divisional structure is the most appropriate structure ( Lee, Kozlenkova, & Palmatier, 2015) . The structure allows the organization to have autonomy among the different service groups. Examples of companies that use divisional structure include Samsung Electronics Company, General Electric, and Sony. Most of these companies have different divisions, services, and products such as renewable energy, aviation, music, technology, and transportation, among many others. Under the divisional structure, each service type or division acts as an autonomous company, manages its own resources, and allocates money to particular projects in the division.
However, some organizations may decide to blend project organizational structure and functional organizational structure. In such as case, the organizational structure is called matrix structure. The organizational structure involves having employees who offer services that involve reporting to two or more employers according to the nature of the project ( Ashkenas et al., 2015) . For instance, an architect working for a big construction firm may be working for one employer but a new project may arise where the architect’s expertise is needed. In such a case, the architect will offer his/her services to their boss but also report to the project manager of a different project.
On the other hand, a company may decide to blend a flat structure and a functional structure to form the flatarchy organizational structure. It occurs in organizations that focus on innovation. Within such system, there may be a formal organizational structure but any employee can come up with ideas and run to the executive team thus creating a flat team within the organizational structure ( Shafritz, Ott, & Jang, 2015) . The organizational structure eases the decision making among all the different level in the company by flattening the vertical organizational structure of an organization. Therefore, the services or ideas generated by employees can easily reach the organization’s leadership. Examples of companies that use the flatarchy system include LinkedIn, Google, and Adobe, among others.
The essay has explained how service types affect the four organizational structures: functional, divisional, matrix, and flatarchy structures. Every organization is unique and the services offered in the company are different. Poor organization structure and design cause slow decision making, contradictions, failure to share ideas, poor coordination, and confusion ( Ashkenas et al., 2015) . Therefore, selecting the right structure according to service type is essential because it determines the future success of an organization.
References
Ashkenas, R., Ulrich, D., Jick, T., & Kerr, S. (2015). The boundaryless organization: Breaking the chains of organizational structure . John Wiley & Sons.
Lee, J. Y., Kozlenkova, I. V., & Palmatier, R. W. (2015). Structural marketing: Using organizational structure to achieve marketing objectives. Journal of the Academy of Marketing Science , 43 (1), 73-99.
Shafritz, J. M., Ott, J. S., & Jang, Y. S. (2015). Classics of organization theory . Cengage Learning.
