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In this lesson, we will provide an overview of the different types of organizational structures a company can
utilize. Read on to learn why having an organizational structure is important.
How decisions are made and implemented throughout every part of an organization
Depending upon a company's needs, there are several organizational structures that can be used.
Some common examples include the flat organizational structure, the functional
organizational structure, the product organizational structure, and the geographical
organizational structure. Let's take a look at these four structures in more detail.
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As you can see, companies use this type of structure when they want to organize their operations
into departments, grouping employees with shared skills and knowledge, such as marketing or
sales, together.
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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 different locations, there may be a need to have support
departments, such as marketing, operations, and finance, in each place as well.
This type of organizational structure is designed to allow companies to better serve local markets.
Lesson Summary
The organizational structure of a company determines:
The main benefit of a formal organizational structure is that it provides clarity for everyone about
what their roles and responsibilities are within an organization. It also allows managers to do a
better job of coordinating and controlling how work is being done, which allows the company as a
whole to operate more efficiently.
Learning Outcomes
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