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What Is Organizational Structure of Management? - Types,


Examples & Quiz
Supplemental Lesson

Quiz

Lesson

(/academy/practice/quizworksheettypes-oforganizationalstructure-of
management.html)Course

Instructor: Molly Gigli

In this lesson, we will provide an overview of the dierent types of organizational


structures a company can utilize. Read on to learn why having an organizational
structure is important.
We also recommend watching Types of Internal Organizational Change: Structural,
Strategic, People, and Process (/academy/lesson/organizational-change-causes-typeschallenges-for-managers.html) and Managerial Challenges Caused by Organizational
Change (/academy/lesson/managerial-challenges-caused-by-organizationalchange.html)

Organizational Structure of Management


An organization's structure lays out the foundation for how the company operates. In
other words, it sets the routine for the organization. The structure determines how
decisions are made and implemented through every part of the organization. It has to
do with how the company organizes and delegates tasks and responsibilities.
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There are a variety of organizational structures that can be used. Some common
examples include at organizational structure, functional organizational
structure, product organizational structure, and geographical organizational
structure. Let's take a look at these four structures in more detail.

Flat Organizational Structure


A at organizational structure is often used for a small company with 20 or fewer
employees. This type of structure has very few levels of management between the
Chief Executive Ocer (CEO)/president and the lower level employees. In this type of
structure, decisions can be made quickly due to the fact there are only a few levels of
management. Here is an example of what a at organizational structure looks like:

Functional Organizational
Structure
Another type is the functional
organizational structure. This type of
structure is focused on job functions or
functional areas. Companies use this type
of structure when they want to arrange
their organization by department. In this type of structure, employees with shared
skills and knowledge are grouped together. Here is an example of what a functional
organizational structure looks like:

Product Organizational
Structure
Another common type of organizational
structure - the product organizational
structure - is focused on the company's
product lines. This type of structure can
typically be found in retail stores that are
in multiple cities. Since this type of
structure can be spread out into dierent
cities, there may be a need to have a marketing, operations, and nance department
in each city.

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Related Video Lessons

Types of Internal Organizational Change: Structural,

Managerial Challenges Caused by Organizational

Strategic, People, and Process

Change (/academy/lesson/managerial-

(/academy/lesson/organizational-changecauses-types-challenges-for-managers.html)

challenges-caused-by-organizationalchange.html)

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The Planned Change Process

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