A guide to understanding organizational structure - what
it is, how it works, and what the best structure is for your
organization to operate efficiently and to accomplish its
What is Organizational
Organizational structure is:
The framework that defines formal reporting relationships
between different positions.
A system that defines the roles and responsibilities of
individuals in the decision-making process.
A methodology used to identify the jobs that need to be
done within an organization and how those jobs relate to
Types of Organizational Structures
Organizations are set up in specific ways to accomplish
different goals. The structure of an organization plays a key
role in how efficiently it runs and its ability to meet its goals
There are three main organization structures:
A functional organizational structure is grouped according
to its purpose or function.
Each area works independently and there are distinct
There is typically an expert, such as a director or manager,
in charge of each area or function.
Decision-making is decentralized within functions.
Functional Organization Chart
Accounting & Research & Sales &
Finance Development Marketing