What is an Organization?
Meaning of an Organization: – An organization is an entity such as a company or an association that consists of one or more people and has a specific purpose. The word is derived from the Greek word organ, meaning instrument or instrument, musical instrument and organ. An organization is a group of people who work together, like a neighborhood association, a charity, a union, or a corporation. Organization is also the act of forming or establishing something (like an organization). Let’s go through the five common types of organization and reasons why you might consider each of them.
What are the types of organization?
There are 5 types of organizations such as Line Structure Organization, Line and Staff Organization, Functional Structure Organization, Matrix Structure Organization and Project Structure Organization.
- Line Structure Organization
Meaning of Line Structure Organization: – Line structure organization is the simplest and oldest form of organization structure. It is called as a scalar type of military or divisional or organization. Under this system, authority flows directly and vertically downward from the top of the managerial hierarchy to different levels of managers and subordinates, and down to the operative level of workers. It is also known as the chain of command or scalar principle.
Advantages of Line Structure Organization: –
- Simple to understand and simple to operate;
- Communication is fast and easy;
- Feedback can be acted upon faster;
- Responsibility is fixed and unified at each level and authority and accountability are clear-cut, hence each individual knows to whom he is responsible and who is or in truth responsible to him;
- Since it is especially useful when the company is small in size, it provides for greater control and discipline in the organization.
- It is a stable form of organization.
Disadvantages of Line Structure Organization: –
- It is a rigid and inflexible form of organization;
- Line authority has a tendency to become dictatorial;
- It overloads the executive with suppressive activities so that long-range planning and policy making are often neglected;
- A line organization can suffer from a lack of specialization. This is because each department manager is concerned only with the activities of his own department.
- Different departments may be more interested in their interests rather than overall organizational interests and welfare;
- This is likely to encourage nepotism;
- It might stop progress and prevent the unit to work effectively.
- It does not provide any means by which a good worker can be rewarded and a bad one can be punished.
- Line and Staff Organization
Meaning of Line and Staff Organization: – Line and staff organization, in management, approach authorities (For example: – managers) establish goals and instructions that are then met by employees and other workers. A line and staff organizational structure attempts to present a large and complex enterprise in a more flexible way without sacrificing managerial authority. Staff groups support those who are engaged in the central productive activity of the enterprise. They back up their work. Staff groups help the organisation in analysing, researching, counselling, monitoring, and in evaluating activities.
Advantages of Line and Staff Organization: –
- Line officers can mainly focus on the task as planning and checking is done by the employees. Specialization provides expert advice and proficiency in management.
- Since the organization includes line and staff functions, decisions can be made easily.
- Staff officers provide complete factual data to line officers covering activity within and without their units. This will help to create more coordination.
- It provides ample opportunities for the advancement of workers.
- Staff services provide a training ground for various positions.
- This arrangement is flexible for newcomers in that employees can be forced to make early adjustments to the line arrangement.
- Staff experts are ideologically oriented to look forward and have time to undertake program and strategic planning and analyze the potential impacts of future potential events.
Disadvantages of Line and Staff Organization: –
- Confusion and conflict may arise between the line and the staff. Because the allocation of authority and responsibility is not clear and the lower level members may be confused with various line orders and staff advice.
- The staff usually advises the lines, but the line makes decisions and tasks. So employees often feel powerless.
- Too much reliance on staff officers may not be beneficial to the business as line officers may have to lose a lot about their decisions and duplication.
- Since staff specialists demand high pay, it is expensive.
- Employees are unable to carry out its plan or recommendations due to lack of authority. So they sometimes become ineffective, this will make them careless and indifferent to their jobs.
- As the line is performed, with advice provided by employees, if things go right, the employee takes credit and if things go wrong, the line gets the blame for it.
- Functional Structure Organization
Meaning of Functional Structure Organization: – Functional Structure Organization is one of the most common structures of organization. They are grouped based on their specific skills and knowledge. Under this structure, the employees are divided into groups by the organization according to a particular or group of tasks. Where functional structures operate well in stable environments, where business strategies have little inclination for change or mobility, the level of bureaucracy makes it difficult for organizations to react quickly to market changes.
Advantages of Functional Structure Organization: –
- The executive or the team leader has the knowledge and experience of that particular field. For example, the person heading the IT department will have the education and skill necessary to shoulder this responsibility and successfully run his team.
- Because the employee has expertise in that particular field, the work is more efficient and precise. There are fewer mistakes. This also helps with the motivation of the employees of the company.
- Since all team members come from similar backgrounds it allows them to share ideas and come up with solutions. There is a sharing of knowledge, which is always beneficial.
- The employees also having a clear idea of the hierarchy of the firm. They need not report or answer to several managers.
- Also, the employees feel secure in their work. They see that their work and efforts is not going unnoticed. This sense of security helps them perform better.
Disadvantages of Functional Structure Organization: –
- The work can be quite one dimensional. After a while, the employees may start feeling monotony or boredom. The lack of new challenges can make them unenthusiastic for the job at hand.
- In this structure, the manager must take care of the appraisal system. If the correct approach is not taken then conflicts may arise between the employees regarding promotions or appraisals.
- Also, this form of organization requires a high degree of specialization which is difficult to establish
- If there is a necessary change of personnel it can disrupt the whole system and its balance. Also, it is quite a rigid structure, not leaving a lot of scope for adaptation.
- In Functional Organizational Structure, the employees never gain any knowledge or skills outside their own department. This can cause difficulties in inter-departmental communication.
- Matrix Structure Organization
Meaning of Matrix Structure Organization: – A matrix organizational structure is a structure of organization in which some individuals report to more than one supervisor or leader, which is described as solid line or dotted line reporting. More broadly, it can also describe the management of cross-functional, cross-business groups and other work models that do not maintain rigid business units or silos grouped by function and geography. For example, an employee may have a primary manager they report to as well as one or more project managers they work under.
Advantages of Matrix Organization: –
- Since there is both vertical and horizontal communication, it increases coordination and this leads to greater and more effective control over operations.
- As the matrix organization is handling many projects, the available resources will be fully utilized.
- It focuses organizational resources on specified projects, thus enabling better planning and control.
- It is highly flexible in following rules, procedures etc. Experience here is the best guide for setting rules and procedures.
- As any department has to put its efforts towards the completion of any one project, employees are effectively motivated.
Disadvantages of Matrix Organization: –
- Since, there is more than one supervisor for each worker, this causes confusion and conflict and reduces effective control.
- There is continuous communication both vertically and horizontally, which increases paper work and costs.
- It is difficult to achieve downward balance on projects technical and administrative aspects.
- Project Structure Organization
Meaning of Project Structure Organization: – A project structure organizational structure is used to determine the hierarchy and authority of people involved in a specific project. This organizational structure is temporarily created for specific projects for a particular period, for the project to achieve the goal of developing a new product, specialize in various functional departments such as production, engineering, quality control, marketing research etc. and will be ready to work together. These specialists return to their duties as soon as the project is completed.
In fact, the project organization is established with the aim of overcoming the major weakness of functional organization, such as absence of unity of command, delay in decision making and lack of coordination.
When to use the project structure organization?
- It is a one-time task and is fixed in the context of a single, specific goal.
- It is big in scope It is unfamiliar or lacks precedent.
- It is complex and calls for a high degree of freedom.
- Successful completion of the project has a high stake.
- The result is very important for the organization.
Advantages of Project Structure Organization: –
- It is a notable depiction of the relationship between environment, strategy and structure.
- The team can focus properly.
- The clustering of activities on the basis of each project initiates new authorization patterns.
- As experts from different organizations are ready to work together under the project organization, it helps in coordination.
- This makes for personal control and determination of personal responsibility.
Disadvantages of Project Structure Organization: –
- The uncertainty can be attributed to the diverse background of the professional who is deputed in the project.
- The project manager finds it difficult to control in the traditional way in order to motivate and control employees, in the absence of a norm of lines and norms responsible for communication.
- Project completion may be delayed.
- Effective project management can also be hindered by top management who may not be fully aware of the problems in the project center.