Functional, matrix, and divisional structures are common organizational models. The functional structure is traditional and divides responsibility by professional title. The divisional structure is task-based and has categories for each major product or service. The matrix structure is a combination of the previous two models. Structures can be modified to fit a company’s needs.
Three of the most common organizational structure models are functional, matrix, and divisional or product. Each of these hierarchical systems helps a company organize its resources and responsibilities. The ultimate purpose of any structure is to provide a framework for continuously working towards achieving the company’s goals.
The functional structure is one of the more traditional models of organizational structure. Divide responsibility by professional title. A typical chart outlining this system would have the president or chief executive officer (CEO) of the company at the top, and all of the other positions listed below. The number of levels for this structure depends on the size of the company and how supervisory roles are organized. A small business may only be one level below the head of the business, while larger organizations may have several branches both vertically and horizontally.
The divisional or product structure is the most task-based of the organizational structure models. Under the head of the company, there is a category for each major product or service offering. There are identical categories under each for marketing, sales, purchasing, and inventory. The individual product lines function as self-contained units. The president or CEO then oversees each line.
The matrix structure is essentially a combination of the two previous organizational structure models. The top of the reporting tree is similar to the functional structure, with the president or CEO at the top and then several other job titles directly below. The lower left branch of the tree lists all product lines or service offerings in the vertical, versus horizontal orientation of the divisional structure.
To the right of each offer in the product list, the steps required to produce each offer are arranged horizontally, with a section that falls under each job title. The titles are sorted by order of function in the process of creating or offering the service and managing all other elements of the product cycle. This can include steps like development, production and marketing. Each of these regional units is self-sustaining and reports to the head of the company, or perhaps a regional manager, who then communicates with the corporate office.
While many organizations use one of these three models, they can also be modified to meet a company’s specific needs. A structure can be modified to fit the needs of the business at the beginning or as the organization changes. For example, a small or medium-sized business may find it more practical to use a simple functional structure, but will use some of the elements of the divisional structure as it grows.
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