An organization’s structure determines how people communicate, make decisions, and stay motivated.
1. Functional Structure
Groups employees by specialized functions (e.g., Marketing, Finance).
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Pros:
- Deep expertise within departments
- Clear career paths and supervision
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Cons:
- Silos may form, limiting collaboration
- Slow decision-making across functions
2. Divisional Structure
Organizes units around products, markets, or regions.
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Pros:
- Strong focus on specific product lines or geographies
- Faster response to local needs
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Cons:
- Resource duplication across divisions
- Potential competition for corporate support
3. Matrix Structure
Combines functional and divisional chains of command.
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Pros:
- Flexible deployment of talent
- Encourages cross-functional teamwork
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Cons:
- Dual reporting can confuse roles
- Political jockeying for scarce resources
4. Network Structure
Centers on a small core organization that outsources major functions.
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Pros:
- Highly adaptable to change
- Leverages external experts
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Cons:
- Less direct control over partners
- Dependency on external stability
5. Team-Based Structure
Organizes around self-managed, cross-functional teams.
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Pros:
- High employee engagement and ownership
- Rapid innovation through diverse perspectives
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Cons:
- Role ambiguity can arise
- Requires strong team-building and conflict-management skills
How Structure Shapes Behavior
• Communication: Hierarchies vs. networks change how information flows.
• Decision-Making: Centralized vs. decentralized structures affect speed and empowerment.
• Motivation: Clear roles boost certainty, while fluid teams drive creativity.
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