We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.
Home

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

What Are the Different Models of Organizational Structure?

K.C. Bruning
By
Updated: May 17, 2024
Views: 15,532
Share

Three of the most common models of organizational structure are functional, matrix, and divisional or product. Each of these hierarchical systems helps a company to organize its resources and responsibilities. The ultimate purpose of each structure is to provide a framework for consistently working towards achieving the company’s goals.

Functional structure is one of the most traditional models of organizational structure. It divides responsibility by job title. A typical chart outlining this system would have the president or chief executive officer (CEO) of the company on top and all other positions listed below. The number of levels for this structure depends upon the size of the company and how supervisory roles are organized. A small business may only have one level below the company head, while larger organizations can have several branches both vertically and horizontally.

Divisional or product structure is the most task-based of the models of organizational structure. Below the company head, there is a category for each major product or service offering. There are identical categories below each for marketing, sales, purchasing, and inventory. Individual product lines function as their own self-sufficient units. The president or CEO then oversees each line.

Matrix structure is essentially a combination of the previous two models of organizational structure. The top part of the hierarchical tree is similar to functional structure, with the president or CEO on top and then several other job titles directly below. The bottom left branch of the tree lists all product lines or service offerings vertically, as opposed to the horizontal orientation of the divisional structure.

To the right of each offering on the product list the steps required for the production of each offering are arranged horizontally, with a section falling under each job title. The titles are arranged by order of function in the process of creating or offering the service and managing all other elements of the product cycle. This can include steps such as development, manufacturing, and marketing. Each of these regional units is self-sufficient and reports to the head of the company, or perhaps a regional manager, who then communicates with the corporate office.

While many organizations use one of these three models, they can also be altered to meet the specific needs of a company. A structure can be altered to fit company needs at its inception or as the organization changes. For example, a small or mid-size company may find it more practical to use simple functional structure, but will use a few of the elements of divisional structure as it grows.

Share
WiseGeek is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
K.C. Bruning
By K.C. Bruning
Kendahl Cruver Bruning, a versatile writer and editor, creates engaging content for a wide range of publications and platforms, including WiseGeek. With a degree in English, she crafts compelling blog posts, web copy, resumes, and articles that resonate with readers. Bruning also showcases her passion for writing and learning through her own review site and podcast, offering unique perspectives on various topics.

Editors' Picks

Discussion Comments
K.C. Bruning
K.C. Bruning
Kendahl Cruver Bruning, a versatile writer and editor, creates engaging content for a wide range of publications and...
Learn more
Share
https://www.wisegeek.net/what-are-the-different-models-of-organizational-structure.htm
Copy this link
WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.

WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.