B1 Intermediate UK 247 Folder Collection
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A standard corporate structure consists of various departments that contribute
to the company's overall mission and goals. Common departments include
Marketing, Finance, Accounting, Human Resource, and IT. These five divisions
represent the major departments within a publicly traded company, though there
are often smaller departments within autonomous firms. There is typically a
CEO, and Board of Directors composed of the directors of each department. There
are also company presidents, vice presidents, and CFOs. There is a great
diversity in corporate forms as enterprises may range from single
company to multi-corporate conglomerate. The four main corporate structures are
Functional, Divisional, Geographic, and the Matrix. Realistically, most
corporations tend to have a “hybrid” structure, which is a combination of
different models with one dominant strategy.
Importance The kind of differentiation and
diversity among corporations is of importance to corporate law. Choosing a
structure for a company is an important decision and must be strategically
thought out because it could either aid or harm the making of business. The
structure must also be a good fit for the type of activities, goals, and
vision of the company. The organizational structure is a reflection
of how convenient business is conducted. Models
= Functional structure = This model is commonly used in
single-program organizations. It is basically the standard structure
mentioned earlier, which is organized around departments. This structure is
most appropriate for small organizations.
= Divisional structure = Divisional structures are also called
product structures because they are based on a certain product or project.
This structure is most common in multi-service organizations. Normally,
It based on the departments divided in the firm.
= Geographic structure = Geographic structures are used in
multi-site organizations and are frequently used by networks across
different geographic areas. = Matrix structure =
The Matrix structure is probably the most complicated model of them all
because it is organized around multiple dimensions, typically with more than one
supervisor. This structure is commonly used in very large organizations because
a greater volume requires greater co-ordination. However, this structure
is very difficult to manage so it is usually better to reconsider its use and
replace it with a different type of structure, then compensate for the
tradeoffs. Classifications
In addition to those models, there are other factors that make up the structure
of an organization. Depending on the chain of command, a company's structure
could be classified as either vertical or horizontal, as well as centralized or
decentralized. A vertically structured organization or a "tall" company
describes a chain of management, usually with a CEO at the top delegating
authority to lower-level managers through mid-level managers. Horizontal
or "flat" companies, however, have almost no middle-managers, which implies
that high-level managers get involved in daily tasks and interact with customers
and front-line personnel. A centralized organizational structure describes how a
company's direction and decisions are set by one individual only.
Centralization compliments companies with "tall" structures to create
Bureaucratic organizations. Decentralized organizational structures
allow individuals some autonomy at each level of the business, because they join
the decision-making process. Evidently, classifying organizations as centralized
or decentralized is linked to them being "tall" or "flat".
Technology There is an emerging trend in the way
companies shape their organizational structures. More businesses are moving
towards a much flatter, decentralized organizational structure. Frank
Ostroff's "The Horizontal Organization", supports this new trend and asserts that
as globalization persists, companies will become more horizontal.
Technological developments accelerate these organizational changes as they
improve the efficiency of business, causing it to restructure departments,
modify position requirements, or add and remove jobs.
Books / authors / theorists Gareth Morgan's Images of Organization:
6 metaphors Frank Ostroff's "The Horizontal
Organization" Henry Mintzberg
Peter Senge and the Learning Organization
Jay Galbraith's Star Model See also
Organizational Culture Organizational Design
Corporate Governance Management
Consulting Firms Non-profit Governing Boards
Board of directors Dual-listed company
Business model References
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Corporate structure

247 Folder Collection
Alec published on December 12, 2016
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