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.

Cross-Cultural Training for Global Virtual Teams

As the working world goes remote, our work dynamics – and those with whom we work – have changed.

One of these changes is that our teams have become more international.

Last week, we talked about what makes for a successful global virtual team.

While you can build a contextually diverse team to maximize creativity or a team that is low in personal diversity for projects that need a quick turnaround, any team you build will need cross-cultural training.

Why?

Because training = competency.

Cross-cultural teams need intercultural skills to thrive.

Such teams face unique obstacles – like differences in work styles and time management.

There are also varied collaboration styles across cultures.

Some team members may not know how to join in and participate, as their own culture may have different hierarchical workplace structures (matrix vs. flat, for instance) or different communication styles (passive vs. dominant, etc.).

This is why cross-cultural training for global virtual teams is paramount to their success.

The Stats

According to culturewizard, formal cross-cultural training was delivered to less than a quarter of working professionals on virtual teams in 2020.

This may be why other stats show that:

“only 15 percent of corporate leaders reported having been successful in leading teams across cultures and countries.” (Culture Wizard, 2018)

How do you run a successful global virtual team if none of them have the tools to work across cultures?

As my book, I am the Monkey!, explores, the deeply ingrained biases we have toward our culture’s own values and norms are something that must be overcome when living and working in other cultures.

It is natural to assume that your methods are “right” while others’ are “wrong.”

Cross-cultural training is essential to acknowledging and overcoming these biases and differences in order to work together more cohesively. 

The Training

While cross-cultural training may be broad or more specific to the project goals at hand, either should cover the following:

  • The development of deeper intercultural insights
  • The ability to channel teammates’ differing cultural perspectives
  • The ability to adapt one’s work style to gel better with the group dynamic
  • The development of constructive intercultural communication skills

Cross-cultural training may delve into other project-specific intercultural dynamics, but generally, any training on the subject should cover these bases.

They are pivotal to a working team.