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About Us (",)
Learning Objectives
What is Organizational Structure?
Key Elements of Organizational Structure
Work Specialization
Chain Of Command
Span Of Control
Centralization and Decentralization
Forms of Organizational Structure
Matrix Organization
Virtual Organization
Organizing Process



Along with assigning tasks and the responsibility for carrying them out, managers must consider how to structure their authority relationships--that is, what structure the organization itself will have, how it will appear on the organizational chart.

The simplest organizational structure, line structure, has direct lines of authority that extend from the top manager to employees at the lowest level of the organization. This structure has a clear chain of command, enabling managers to make decisions quickly, but requires that managers possess a wide range of knowledge. Line structures are most common in small businesses.

The line-and-staff structure has a traditional line relationship between superiors and subordinates, and specialized managers--called staff managers--are available to assist line managers. Line managers focus on their area of expertise, while staff managers provide advice and support to line departments on specialized matters. This structure may result in overstaffing and ambiguous lines of communication.

A multidivisional structure groups departments together into larger groups called divisions, organized on the basis of geography, customer, product, or a combination. Multidivisional structures permit delegation of decision-making authority, allowing divisional and department managers to specialize. They allow better, faster, more innovative decisions and help each division focus on the unique needs of its customers. However, the divisional structure creates duplication of resources.

A matrix structure, also called a project-management structure, sets up teams from different departments, thereby creating two or more intersecting lines of authority. Project departments are superimposed on the more traditional, function-based departments. These structures are generally temporary. Matrix structures provide flexibility, enhanced cooperation and creativity, and responsiveness, but they are generally expensive and quite complex.