Workplace Organizational Structures: The Pros & Cons of Divisional, Matrix, Network, and Team Workplaces

Working with global virtual teams means working with employees who may have different norms when it comes to workplace organizational structures.

Last week, we talked about the pros and cons of hierarchical, flat, and functional structures.

Today, we’re discussing divisional, matrix, network, and team workplaces.

Divisional Structure

Divisional structures are often used by large companies.

In this organizational structure, each division of a company operates like its own company within a larger organization.

They control their own resources and may each have their own sales, marketing, and IT teams.

This structure also allows divisions to make their own decisions without everything requiring approval from the big boss.

This type of structure may be market-based, product-based, or geographically-based.

Divisional pros:

  • Provides flexibility
  • Enables customization and autonomy
  • Allows more efficient response to customer needs

Divisional cons:

  • May lead to in-company conflict/competition
  • Can create duplicate resources
  • Communication may become confused or lax between the divisions and headquarters

Matrix Structure

If a company has many special projects, it may use a matrix organizational structure.

Such structures enable the formation of cross-functional teams.

For instance, a graphic designer might work in the art department, led by an art director, but be placed on temporary projects, led by a project manager.

Matrix pros:

  • Individuals are chosen by needs and expertise
  • Skills can be applied in various ways
  • The organization becomes more dynamic

Matrix cons:

  • Department managers and project managers may butt heads
  • The organizational chart changes frequently, which may cause confusion

Network Structure

When resources are spread in a company, a network organizational structure can create order out of it.

This type of structure is best for businesses that may include multiple freelancers, subcontractors, vendors, locations, etc.

Network structures rely more on relationships and open communication than hierarchy.

Network pros:

  • Connects the web of offsite and onsite relationships
  • Enables flexibility and promotes collaboration
  • Empowers employees to make decisions

Network cons:

  • Offsite processes can become complex
  • Lack of hierarchy can confuse employees about final decisions

Team Structure

This type of structure kicks open a traditional hierarchy and groups employees into teams.

Team structures promote employee autonomy and control, cooperation, and problem-solving.

Team pros:

  • Performance, productivity, and growth mindset are often boosted
  • Management is minimal
  • Experience becomes more important than seniority

Team cons:

  • May not be applicable to many organizations
  • Blurs the lines to paths of promotion

As we also saw last week, each organizational structure has its pros and cons.

Choosing the structure that works best for your organization – and being aware of other management approaches regarding cultural norms – will help you lead a global virtual team.

Workplace Organizational Structures: The Pros & Cons of Hierarchical, Flat, and Functional Workplaces

Over the past few weeks, we’ve discussed how to build the best global virtual team, the challenges of working virtually and cross-culturally, and how to best manage such a team.

One of the cross-cultural challenges discussed was differences in norms regarding organizational structures in the workplace.

Some cultures prefer a hierarchical structure with a clear chain of command. Others prefer a flat structure, which is often more collaborative.

Over the next couple of posts, we’ll discuss various organizational structures.

Knowing about these structures as a manager will help you understand how others might be accustomed to working.

Hierarchical Structure

The hierarchical structure is probably the most common organizational structure in a workplace.

It has a clear and direct chain of command, with a senior manager at the top, followed by various departmental executives, followed by supervisors/team leads, all the way down to general employees.

Those at the highest level – the CEO, for instance – have the final say in decisions.

The CEO’s decisions may, however, require approval by a board of directors.

Each structure has its pros and cons.

Hierarchical pros:

  • Provides clear career paths
  • Offers a clear chain of command, thus reducing conflict
  • Helps businesses streamline processes
  • Leaves little room for dissent from those low on the chain (which can be good or bad, depending on how you look at it)

Hierarchical cons:

  • May negatively impact employee morale
  • Can slow decision-making processes, as approval is needed
  • May stunt innovation and creativity, as fewer are allowed the power to make decisions

Flat Organization Structure

Small businesses and startups typically use a flat organizational structure.

They must often adjust to a stabler structure once they move past the startup stage.

As you may have guessed, this structure is much less hierarchical with fewer middle managers between the lower-level employees and top dogs.

Flat pros:

  • Less supervision required
  • More responsibility given to employees
  • Trust and open communication
  • Greater employee involvement and ease of coordination

Flat cons:

  • Potential for more conflict and confusion
  • Sometimes slows decision-making processes, as people cannot agree
  • May stunt specified skills or knowledge

Functional Structure

A functional structure involves departments made up of specialized work functions, each with a designated and experienced leader.

The decision-making process is generally centralized in this type of organization, with department heads reporting to upper management.

The team leads communicate with each other to coordinate, and the team members below them typically have little involvement with that process.

Functional pros:

  • Employees focus on specialized tasks
  • Each department fosters teamwork toward a joint goal
  • Is scalable no matter the size of the business

Functional cons:

  • Coordination can be lacking
  • Big picture context is lost on lower-level employees
  • Company processes and strategies can become confused

As you can see, each organizational structure strong and weak points.

The type of structure you choose should be best suited to the business you’re running.

Without a strong structure that supports your business and the type of work culture you wish to promote, you will face difficulties in productivity, coordination, communication, and overall morale.

Next week, we’ll talk about four additional workplace organizational structures.

Cultural Ambiguity & Uncertainty: Following the Line of Logic to Understanding

One of the most difficult parts of managing across cultures is a sense of ambiguity and uncertainty when it comes to rules.

Those from rule-based cultures, thrust into relationship-based environments, likely find the rules ambiguous, and vice versa.

Unsurprisingly, the rule-based US culture professes a fundamentally rule-based management theory, decidedly offering straightforward advice regarding successful management.

Take “ad res” versus “ad personam,” for example.

Ad Res vs. Ad Personam

hierarchychartAmerican universities teach an “ad res” organizational theory, in which organizations are structured in a chart adapted to the business. The names can be altered in the chart, as the organizations are indifferent to the people who fill the roles.

However, this differs from how relationship-based cultures view organizational structures. In these cultures, organizations consider “ad personam” to be correct, which is quite the opposite of “ad res.”

With “ad personam” organization, the individual people come first.

Vagueness Leads to Misunderstanding

This is just one example of the way a culture’s values shape their management theory and structures. Just one more reason to clarify any cultural ambiguity or uncertainty in order to better manage within another culture.

Uncertainty stems from vague values, norms, and behaviors, which lend themselves to wrong assumptions.

When things are uncertain or ambiguous, the first step is always to seek understanding.

As we talked about early in this blog, finding the rationale behind the values, norms, and behaviors of your cross-cultural counterparts is essential to clarifying uncertainty and ambiguity.

And the first steps in seeking understanding are to:

  1. Identify the conflicting issue – pinpoint whatever it is that’s rubbing your own values and beliefs the wrong way.
  2. Look at the issue from the other culture’s baobab tree – keeping in mind what you’ve learned about the culture, try to see the issue from their perspective, their standpoint, their worldview.
  3. Seek out the advantages in their perspective – when you approach the issue from your own baobab, you’ll probably see the other’s perspective in a negative light; but from their baobab, a spotlight is shone on their train of thought, allowing you to see more clearly.
  4. Find the line of logic – while seeking understanding may not bring you in line with the other’s ideas of personal and social responsibility, finding their line of logic will lead you to a place of clarity. And with clarity comes understanding.

What Are Their Advantages?

When faced with conflicting cultural behaviors, values, norms, and management methods, ask yourself these questions:

What are their baobab’s benefits?

Why and how are their methods successful in their culture?

When you seek understanding instead of discriminating; when you start looking at another culture through their own lens, you may just discover significant advantages to their methods and values.

In doing so, you may also see the disadvantages and limitations of your own culture and ways you can improve your own culture. In fact, you may adopt certain behaviors, values, or norms that you appreciate.

Next week, we’ll take a look at one of the limitations that the individualistic West has started to improve on: corporate social responsibility.