There are three types of organizational structure primarily used in business models today: matrix structure, divisional structure and functional structure. Each of these structures has been noted to have both strong points and weak points. In order to maximize the strong points and minimize the weak points, many companies have adopted a form of all three organizational structure types, resulting in a combined structural model.

The matrix organizational structure type combines the other two organizational structure types. Employees that work in this structure model have the possibility of answering to two different managers. For example, a product manager and a performance manager. It is difficult to implement this structure because of the intricacies involved with having two different authority figures in charge. It has however, been found to be extremely helpful for companies that operate on a multinational level.

For the functional structure type , employees are assigned to departments based on the function of their job. This structure highlights the experiences of each area. For example, employees that work in the same department are able to exchange information and support each other, almost like a small team. Coordination among the department is easy although interdepartmental communication can be difficult to effectively maintain. Flexibility is not very evident with this structure type.

For the divisional structure type, employees are divided based on several different areas. For example, they work in a division that handles products, customer service and geographic location. Each of these divisions is responsible for handling everything having to do with a product and the resources used to support it. The division is in charge of maintenance, supply chain management, marketing, and finance. This type of structure allows for a great deal of flexibility within the division and is quick to respond to environmental changes. It encourages differential strategies and innovation. Divisions operate almost like little companies themselves, functioning completely separate from the main company.

Each of these organizational structure types has its advantages and disadvantages. Whether a company is in the process of starting up or revamping their entire business model, it is important to look at each type and determine what best suits the company’s needs. It may also be necessary to enhance the current structure type so necessary actions should be taken by management to improve upon positive effects and limit the disadvantages that may come with the chosen structure.

Whichever structure a company adopts, the results of the model are the main importance. It cannot be a perception that the company is the best but rather a detailed investigation into how the company rates with other similar companies. Take the time to conduct a complete evaluation and listen to the feedback of those working in these structures. It is possible that they will provide innovative and exciting new ways to run the company.

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