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How to compare and contrast organisational structure

Updated March 23, 2017

Organisational structure is the framework used by a company to divide the processes, activities and responsibilities needed to complete business operations. Most companies use a well-defined structure that lists management positions and who is responsible for specific tasks and activities.

Types

Common types of organisational structures include functional, geographic, product and customer. Function creates a structure based on activity, geographic on the location of businesses or departments, product based on lines or items produced in groups and customer based on individual, business or government consumers.

Considerations

Companies may decide to use a matrix organisational structure, which combines one or more structure bases. For example, combining product and customer structures allows a company to manufacture and market specific goods or services for different customer types.

Effects

Organisation structures will typically fall under a centralised or decentralised form. Centralised relies on one individual to make decisions while decentralised organisations will rely on several individuals for decisions.

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