Every company needs a form of structure in order to succeed. A business structure should lead your business to an end goal of success and help new employees become integrated into your company. There are many different types of organizational structures that a business can choose from but it is up to you to decide which structure works best for your desired business goals. Below we discuss three of the most popular organizational structures and what types of businesses they function best in.
Functional structures are one of the most common forms of business structure characterized by their rigidness with little wiggle room among the designated sectors. The model follows a downward flow with CEO’s and Executives at the top, department managers towards the middle, and employees who work within these departments at the bottom. Each department is managed by their specific department heads. Since workers are divided and work together based on their job titles, employees are able to complete work quicker and communicate easier between their departments. Although communication within divisions is easier, functional models can have problems if the upper executive is weak or if quick adjustments need to be made to adapt in an ever-changing marketplace.
This structure is more suited for larger companies that have grown into national or global markets. A variation of the functional model, the regional structure is organized by having the top executives from each country with the regional managers directly below them. As a result, any questions or consumer wants are easily met at a regional level and handled by the regional managers.
Unlike the last two structures, matrix models are much more free-flowing. There are people who hold authority such as managers and directors but every department is equal to one another and works together to complete a task or project. Jobs can overlap and departments must receive information from one another to complete products.
Choosing the right organizational structure for your business is essential to ensure longterm success. For more information regarding business operations, contact Vanguard Resources at 210-495-1950.