to the company's overall mission and goals. Common departments include

Marketing, Finance, Accounting, Human Resource, and IT. These five divisions

represent the major departments within a publicly traded company, though there

are often smaller departments within autonomous firms. There is typically a

CEO, and Board of Directors composed of the directors of each department. There

are also company presidents, vice presidents, and CFOs. There is a great

diversity in corporate forms as enterprises may range from single

company to multi-corporate conglomerate. The four main corporate structures are

Functional, Divisional, Geographic, and the Matrix. Realistically, most

corporations tend to have a “hybrid” structure, which is a combination of

different models with one dominant strategy.

Importance The kind of differentiation and

diversity among corporations is of importance to corporate law. Choosing a

structure for a company is an important decision and must be strategically

thought out because it could either aid or harm the making of business. The

structure must also be a good fit for the type of activities, goals, and

vision of the company. The organizational structure is a reflection

of how convenient business is conducted. Models

= Functional structure = This model is commonly used in

single-program organizations. It is basically the standard structure

mentioned earlier, which is organized around departments. This structure is

most appropriate for small organizations.

= Divisional structure = Divisional structures are also called

product structures because they are based on a certain product or project.

This structure is most common in multi-service organizations. Normally,

It based on the departments divided in the firm.

= Geographic structure = Geographic structures are used in

multi-site organizations and are frequently used by networks across

different geographic areas. = Matrix structure =

The Matrix structure is probably the most complicated model of them all

because it is organized around multiple dimensions, typically with more than one

supervisor. This structure is commonly used in very large organizations because

a greater volume requires greater co-ordination. However, this structure

is very difficult to manage so it is usually better to reconsider its use and

replace it with a different type of structure, then compensate for the

tradeoffs. Classifications

In addition to those models, there are other factors that make up the structure

of an organization. Depending on the chain of command, a company's structure

could be classified as either vertical or horizontal, as well as centralized or

decentralized. A vertically structured organization or a "tall" company

describes a chain of management, usually with a CEO at the top delegating

authority to lower-level managers through mid-level managers. Horizontal

or "flat" companies, however, have almost no middle-managers, which implies

that high-level managers get involved in daily tasks and interact with customers

and front-line personnel. A centralized organizational structure describes how a

company's direction and decisions are set by one individual only.

Centralization compliments companies with "tall" structures to create

Bureaucratic organizations. Decentralized organizational structures

allow individuals some autonomy at each level of the business, because they join

the decision-making process. Evidently, classifying organizations as centralized

or decentralized is linked to them being "tall" or "flat".

Technology There is an emerging trend in the way

companies shape their organizational structures. More businesses are moving

towards a much flatter, decentralized organizational structure. Frank

Ostroff's "The Horizontal Organization", supports this new trend and asserts that

as globalization persists, companies will become more horizontal.

Technological developments accelerate these organizational changes as they

improve the efficiency of business, causing it to restructure departments,

modify position requirements, or add and remove jobs.

Books / authors / theorists Gareth Morgan's Images of Organization:

6 metaphors Frank Ostroff's "The Horizontal

Organization" Henry Mintzberg

Peter Senge and the Learning Organization

Jay Galbraith's Star Model See also

Organizational Culture Organizational Design

Corporate Governance Management

Consulting Firms Non-profit Governing Boards

Board of directors Dual-listed company

Business model References