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 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.
- Provides flexibility
- Enables customization and autonomy
- Allows more efficient response to customer needs
- May lead to in-company conflict/competition
- Can create duplicate resources
- Communication may become confused or lax between the divisions and headquarters
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.
- Individuals are chosen by needs and expertise
- Skills can be applied in various ways
- The organization becomes more dynamic
- Department managers and project managers may butt heads
- The organizational chart changes frequently, which may cause confusion
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.
- Connects the web of offsite and onsite relationships
- Enables flexibility and promotes collaboration
- Empowers employees to make decisions
- Offsite processes can become complex
- Lack of hierarchy can confuse employees about final decisions
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.
- Performance, productivity, and growth mindset are often boosted
- Management is minimal
- Experience becomes more important than seniority
- 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.