Five Organization Structure Types

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A company can be structured in five ways. Each of these will be briefly discussed here.

Based on the way labor is distributed and coordinated within a company, five types of organizational structure can be discerned, each of which will be briefly discussed here.

1. Simple Structure

In a company with a simple structure, there is a slight division of labor and a scarcely developed organizational structure. Coordination and ‘tuning’ of the work is done through direct supervision, mostly by the director or owner him- or herself. Especially young and small organizations in a turbulent environment are characterized by this type of structure.

This structure often leads to bonding between the employees and to the work. The relation with the product and the importance of the work are mostly obvious.

2. Machine Bureaucracy

The most important aspect of the machine bureaucracy is the standardization of the work processes. Staff departments take care of the regulation of these processes. The work is supposed to be done in accordance with strict rules and regulations. The performed labor shows a routine character and a short cycle time.

This type of structure is often found in large ‘mature’ companies that operate in a relatively stable environment.

3. Professional Bureaucracy

In this type of structure, the most important aspect is the standardization of competences. Not the work, as in a machine bureaucracy, but the required skills are standardized. This means the accent lies on the selection, training and education of employees. Once hired and properly trained, the employee has a large degree of independence. Here, often conflicts arise between the directive level and the professionals.

This type of structure is often noticed in fairly stable, but complex, environments.

4. Division Structure

With the company’s goal in mind, an organization that operates in different environments, is made up out of units that each demand a unique structure. This structural differentiation is achieved by determining only the desired output of each separate unit. The process that leads to this output is entirely left to the unit leaders. This, in turn, leads to the rise of divisions within a larger concern structure.

This form of organization is mostly found in large multinationals, where the principle of delegation and control based on the results is implemented.

5. Adhocracy

Ad-hoc organizations (or adhocracies) are changing amalgams of professionals that work together on a complex problem. After this is done, they each go their own way and start a new project with other people.

Examples of such a decentralized way of working is often found in innovative projects, such as the space industry.