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Explanation:
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types of organizational charts
7 types of organizational structures (+ org charts for implementation)
Reading time: about 8 min
Posted by: Shannon Williams
Types of organizational structures
Hierarchical org structure
Functional org structure
Horizontal or flat org structure
Divisional org structures (market-based, product-based, geographic)
Matrix org structure
Team-based org structure
Network org structure
At some point, you have likely seen an organizational chart for your company. And we can probably guess what it looked like.
The typical org chart looks like a pyramid, your C-level executives at the top with lines stretching down to middle management and finally staff-level employees.
But not every company functions best with a hierarchical organizational structure. Many types of organizational charts exist because many types of organizational structures exist.
Let’s go through the seven common types of org structures and reasons why you might consider each of them.
1. Hierarchical org structure
hierarchical org chart example
Hierarchical Org Chart Example (Click on image to modify online)
The pyramid-shaped organizational chart we referred to earlier is known as a hierarchical org chart. It’s the most common type of organizational structure––the chain of command goes from the top (e.g., the CEO or manager) down (e.g., entry-level and low-level employees) and each employee has a supervisor.
Pros
Better defines levels of authority and responsibility
Shows who each person reports to or who to talk to about specific projects
Motivates employees with clear career paths and chances for promotion
Gives each employee a specialty
Creates camaraderie between employees within the same department
Cons
Can slow down innovation or important changes due to increased bureaucracy
Can cause employees to act in interest of the department instead of the company as a whole
Can make lower-level employees feel like they have less ownership and can’t express their ideas for the company
2. Functional org structure
functional org chart example
Functional Org Chart Example (Click on image to modify online)
Similar to a hierarchical organizational structure, a functional org structure starts with positions with the highest levels of responsibility at the top and goes down from there. Primarily, though, employees are organized according to their specific skills and their corresponding function in the company. Each separate department is managed independently.
Pros
Allows employees to focus on their role
Encourages specialization
Help teams and departments feel self-determined
Is easily scalable in any sized company
Cons
Can create silos within an organization
Hampers interdepartmental communication
Obscures processes and strategies for different markets or products in a company
