Different types of organisations have different types of benefits. Some of them support greater innovation, and others are based on efficiency. Knowing what type of organisation you want is the first step to understanding what type of organizational structure you need, and choosing one that works the best for you. Alternately, you could create your own.
Of the two traditional types of organizational structures, mechanistic structures are closer to bureaucracies. They tend to have more formal lines of communication, higher centralisation, more levels in the organizational hierarchy, and a higher degree of departmentalisation. Because of the rigid means of decision and communication, innovation and autonomy is limited. However, in a more stable environment, they often have greater efficiency due to everyone knowing what their job is at all times. A standard mechanistic organisation could be the military, where the overall long-term condition is very stable, and job descriptions are very specific.
Organic structures are more fluid and flexible, with looser employee descriptions and more autonomy. Lines of communication are less formalised, and people are asked to make more decisions lower on the organizational hierarchy. This type of structure leads to more innovation and improvement throughout the company, and is better in unstable situations. However, due to less specifics than the mechanistic organisation, it can also lead to greater role ambiguity. Google is one example of an organic structure, with teams being reorganised quite often and members being placed in low-level management positions dependent on their relevant expertise.
A matrix structure is a cross between a traditional functional structure (mechanistic or organic) with a product structure. A product structure breaks up departments by what product they are working on at a time instead of their function. With a matrix structure, teams report both to their functional manager and their project manager so that communication is sped up with both parts of the organisation while maintaining technical efficiency. However, matrix management violates the unity of command principle, causing lines of communication to not always be as clear and to occasionally lead to members getting conflicting orders from different bosses.
Boundaryless organisations are a type of organisation that attempts to remove as many barriers as possible between departments, as well as between the organisation and the customer. A simple example of this would be a modular organisation, in which all non-essential tasks have been outsourced, leaving a single homogeneous value-generating department in house. Toyota is one example of this, with thousands of small suppliers that it interacts with like smaller departments.
Learning organisations are organisations in which changing how the organisation works and is structured is a natural part of the acquisition of knowledge. Testing new ways of doing things and methods of changing the structure is encouraged, and often implemented at small scales before being used organisation-wide. Often this is done by implementing small independent business units that are allowed to act on their own within loose guidelines with funding from the main organisation. IBM is one of the most famous examples of this, specifically allowing breakthrough technologies to have their own small business units to try to turn innovation into products.
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