There are a number of different types of organizational structures, and every business has one or more of them. These can vary from a traditional hierarchy of management, to an advisory board, or even no structure at all. While some of these types of structures are very effective, many others may not be as effective. There are also a number of other structures, such as those which are used by smaller organizations and start-ups, that we’ll look at.
The first type of structure we’ll look at is the classic hierarchical structure. This type of structure is characterized by management, which will often be described as a “company” rather than as a “group.” It is based on the idea that the company has a leader (either the CEO or the president) who will be in charge of the entire company, making decisions, making changes to policies and procedures, and making the overall direction of the company. In this form of structure, the executive is described as the “breadwinner,” while those who work under him or her are the “wage earners.” There is a hierarchy of management and everyone within it plays a part in the running of the company.
One of the main problems with this type of management is that in today’s more “flexible” business environment, the general manager will rarely have the opportunity to make the big decisions. He or she will generally only be in charge of implementation, dealing with those matters that are outside his or her area of expertise. This makes this type of structure difficult to operate in the face of outside factors that change quickly and rapidly. Even though there may be advantages to operating under a hierarchy, it is not always the best way to run a business.
Another type of structure that might not sound as imposing as the previous one, but has the ability to affect every aspect of your business, is the advisory board. An advisory board is a group of people who will be educated about the business, are supported by a legal team, and will provide valuable feedback about your business and the direction it is going. Typically they are drawn from different areas of the business, from different levels of leadership, and often times come from the community, as well.
The third type of structure we’ll talk about is the no structure at all type. These structures do not involve any kind of hierarchy, even when it comes to the process of appointment and demotion within the structure. In this case, there is no chain of command. Instead, every individual will have to communicate with everyone else through the entire structure to ensure that all tasks are done in a timely manner.
One of the reasons why this type of structure works better is because it leaves more room for creativity. Instead of dictating how the organization will run, there is no such thing as a leader. Each person has a seat at the table and that includes the staff, the customers, and the staff themselves. This also allows for more flexibility, allowing for ideas to flow freely, and for different people to contribute to the future direction of the organization.
As you can see, there are several different business types that offer varying degrees of flexibility and efficiency. If you want to develop a new model of business, there is no better way to start with than by examining the various types of structures that exist today. We hope that our guide was helpful in understanding this subject and what each type of structure offers.
Our final point is to highlight how important it is to understand the different types of structures, and how they can affect your company in a positive or negative way. Understanding the dynamics of your organization is critical for operating your business in the best possible way. So, if you need help deciding which type of structure to adopt, we hope our guide provided some help in finding the structure that is best for your organization.