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What do you mean by organizational structure? Acknowledging and harmonizing differences and commonalities in three prominent perspectives

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• Published: 11 October 2023
• Volume 13 , pages 1–11, ( 2024 )

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• Daniel Albert   ORCID: orcid.org/0000-0003-3888-1643 1  

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The organizational design literature stresses the importance of organizational structure to understand strategic change, performance, and innovation. However, prior studies diverge regarding the conceptualizations and operationalizations of structure. Organizational structure has been studied as an (1) arrangement of activities, (2) representation of decision-making, and (3) legal entities. In this point-of-view paper, the three prominent perspectives of organizational structure are discussed in terms of their commonalities, differences, and the need to study their relationship more thoroughly. Future research may not only wish to integrate these dimensions but also be more vocal about what type of organization structure is studied and why.

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Introduction

An important area of research in the organization design literature concerns the role of structure. Early research, including work by Chandler ( 1962 , 1991 ) and Burgelman ( 1983 ), has studied how strategy execution depends on a firm’s structure, and how that structure can influence future strategies. Moreover, prior work has explored organizational structure and its connection to strategic change (Gulati and Puranam 2009 ), performance (Csaszar 2012 ; Lee 2022 ), innovation (Eklund 2022 ; Keum and See 2017 ) and internal power dynamics (Bidwell 2012 ; Pfeffer 1981 ), among others.

What is surprising is the divergence in understanding what constitutes and defines organizational structure. This becomes particularly apparent when considering how structure has often been operationalized in prior studies. While there are a variety of conceptual and empirical approaches to organizational structure, this point of view paper focuses on three particularly prominent perspectives. Scholars of one stream of operationalization have argued that structure is how business activities are grouped and assessed in the form of distinct business units (or divisions) (Karim 2006 ; Mintzberg 1979 ), which may represent a company’s operating segments for internal and external reporting (Albert 2018 ). In another stream of operationalization, scholars argue that structure is inherent in the organizational chart, specifically, the chain of command and the allocation of decision-making responsibilities. Often, a simple yet powerful proxy has been to consider the roles assigned to the top management team members (Girod and Whittington 2015 ). Finally, a third type of operationalization of structure is the composition and arrangement of legal entities (Bethel and Liebeskind 1998 ; Zhou 2013 ), specifically, discrete subsidiaries constituting an organization’s business activities. This may be the most consequential understanding of structure as it relates to the containment of legal responsibilities.

These three perspectives overlap in some cases but may also characterize organizational structure differently in important ways. In a clear-cut case, a firm may consist of a top management team that perfectly reflects its business divisions and units, reported by consolidated but legally distinct entities. However, when examining the financial filings of different corporations, a different picture emerges as such clean alignment is often not the case. Not only are well-studied differences in the corporation's legal form (such as holding versus integrated) present, but top management responsibilities and reporting of business divisions often show that structure is indeed a multi-dimensional phenomenon in organizations.

To illustrate how different perspectives may lead to varying conclusions about organizational structure, two companies, the financial service firm Citigroup and the automotive company Ford Motor, are briefly discussed with respect to each perspective. Both Citigroup and Ford Motor are interesting cases, as they are large organizations with diversified business operations across various industry segments and a presence in multiple geographical markets. This complexity in business operations underscores the necessity of an organizational structure to implement and execute the firms' respective strategies.

The objective of this point of view is to emphasize and discuss the co-existence of fundamentally different measures and their underlying assumptions of organizational structure. These three perspectives highlight different aspects of organizational structure and can help reveal important nuances idiosyncratic to specific organizations. That is, complementing one perspective with one or two other perspectives can paint a more holistic picture of firm-specific structural designs. The “arrangement of activities” perspective provides generally a measure that captures sources of value creation, that is, the groupings of economic activities and knowledge. The “decision making representation” perspective provides generally a measure of hierarchical allocation of decision rights and has been likened to the level of centralization, that is, which responsibilities are specifically assigned to the highest level of decision-making. The “legal entities” perspective often captures decentralization as "truly" autonomous activities that can render integration more difficult and, therefore, imposes greater decentralization among such units.

A follow-up goal of this point of view paper is to discuss the implications and future research opportunities of clearly distinguishing between these perspectives in organizational design studies. A completely new area of research constitutes the inquiry of the relationships between these perspectives and whether and when alignment between the perspectives is enhancing or hindering performance, innovation, and strategic change. It is important to note that this point of view paper is not meant to provide an exhaustive list of perspectives of organizational structure, but to spark a constructive discussion around the theoretical and operational differences and commonalities between the arguably most prominent perspectives. Additional perspectives of organizational structure are discussed in the limitations section.

Three perspectives of structure

Structure as arrangement of activities.

This perspective suggests that groups of economic activities, managed and reviewed together, make up departments, units, and divisions that form the organizational structure (Joseph and Gaba 2020 ; Mintzberg 1979 ; Puranam and Vanneste 2016 ). In the middle of the twentieth century, Chandler ( 1962 ) observed that large American corporations not only diversified into a greater number of different business activities but also started to organize business activities into separately managed divisions, which are typically overseen by a corporate center unit. The organization of activities into compartments is often nested, that is, activities within a given compartment are further organized into subunits and so on. In a more general sense, such compartmentalization constitutes the division of labor (or specialization) in an organization, which can be organized along various dimensions. The most prevalent dimensions along which activities are organized into units include customer segments, products, geography, and functional domains, such as research and development, marketing, and sales activities (Puranam and Vanneste 2016 ).

The way activities are organized has been often related to archetypical designs, such as a more homogenous organization that is organized along functions and multi-divisional corporations that are more heterogenous in the activities making up business divisions (e.g., Raveendran 2020 ). The corporate center is often considered as a distinct unit of activities that holds the design rights of the organization, allowing it to organize these activities (Puranam 2018 ). The center may also play a coordinating role in the management of interdependencies between divisions to ensure alignment with corporate-level goals (Lawrence and Lorsch 1967 ) and foster value creation (Foss 1997 ).

Scholars of this perspective have studied how the arrangement of activities into compartments is associated with the propensity and type of reorganization (e.g., Karim 2006 ; Raveendran 2020 ), as well as its association with innovation outcomes (e.g., Karim and Kaul 2014 ). These two outcomes of interest are closely related, as compartments consist of employees and resources that constitute a source of knowledge that may be rearranged or combined with other units to address a (changing) market in novel and more efficient ways. Hence, this perspective may help to understand the sources of performance and innovation.

Illustration of arrangement of activities perspective

Figure  1 shows Citigroup’s operating business segments, which are in line with accounting regulations that require businesses to disclose operations in the way in which activities are managed internally and held accountable for cost and revenues (see Financial Accounting Standards No. 131). Accordingly, Citigroup operates three business segments, “Institutional Clients Group (ICG)”, “Personal Banking and Wealth Management (PBWM)” and “Legacy Franchises”, which are predominantly groupings of economic activities based on customer segments (i.e., institutional clients, private clients, and consumer clients). These groupings encompass various activities around this customer segment and the relevant product offerings. For example, the division Personal Banking encompasses activities for retail clients, such as Citibank’s physical retail network and online banking as well as private wealth operations for high-net-worth individuals. The respective segments may be understood as the organization’s business divisions, whereas further, nested, groupings exist within these divisions (e.g., U.S. Personal Banking constitutes a subunit with further subgroupings into Cards and Retail Banking operations). Supporting activities and operations that are not part of one of the three divisions are managed by the corporate center unit.

Citigroup’s operating business segments. This figure is the author’s own drawing but entirely based on Citigroup’s 2022 10-K report (page 2)

In Table 1 , the operating business segments are shown for the automotive company Ford. Accordingly, Ford operates six main segments (and one reconciliation of debt segment), “Ford Blue”, “Ford Model e”, “Ford Pro”, “Ford Next”, “Ford Credit”, and “Corporate Other”. These groupings encompass various product and customer segment activities, such as the “Ford Blue” legacy business of internal combustion engine automotives, under the Ford and Lincoln brands. Electric vehicle-related activities are grouped under “Ford Model e”, whereas “Ford Pro” groups activities to address corporate clients who seek to optimize and maintain fleets. Noteworthy is also the segment “Ford Next”, which is a grouping of investment activities into emerging business models. While these segments (i.e., divisions) encompass various activities, information is limited with respect to any nested groupings within these segments (or a potential lack thereof).

Structure as decision making representation

This perspective suggests that the job roles in the top management team (TMT) are reflective of the organizational structure, as executives are charged to oversee certain activities (Girod and Whittington 2015 ; Guadalupe et al. 2013 ). At first glance, this understanding is fairly similar to that of the arrangement of activities. At a closer look, however, the TMT structure perspective is more indicative of an information processing perspective. At the center of the information processing perspective lies hierarchy as a mechanism to cope with information uncertainty and resolve conflicts (Galbraith 1974 ). Moreover, information processing has long been considered as the way in which key decision-makers can ensure coordination and integration of units (Joseph and Gaba 2020 ). That is, the top management roles may in fact extend beyond the formal task structure and include the reintegration and coordination of activities more broadly.

The assignment of decision-making responsibilities can reveal how the organization “thinks” about interdependencies, such as the need to coordinate resources, the potential to leverage synergies and so forth. For example, roles that largely define autonomous areas of business allow managers to make decisions more independently from one another. In contrast, roles that are focused on dedicated functions, such as research and development, marketing, and finance often require greater coordination among managers (e.g., Hambrick et al. 2015 ). Hence, the decision-making representations in the top management team may be understood as a hierarchy mechanism to manage and even create interdependencies between activities. A case in point is the deliberate assignment of creating synergies between otherwise standalone units, for example, in the form of executives holding multiple roles that span several divisions.

While the assignment of decision-making responsibilities clearly relates to efforts of coordination and integration, it can also explain the emergence of internal power and politics dynamics (Cyert and March 1963 , Pfeffer 1981 ). For example, Romanelli and Tushman 9/14/2023 7:00:00 PM suggest that top management turnover is a measure of power dynamics in organizations and treat this as entirely distinct from organizational structure. Moreover, the upper echelons perspective has proposed that organizational choice and strategic outcomes are, at least in part, a direct reflection of the backgrounds of the leadership's individuals (Hambrick and Mason 1984 ), which suggests that design choices, such as organizational structure are decided under the auspice of the very same individuals (Puranam 2018 ) that researchers have used as a proxy to measure organizational structure. This emphasizes the importance of considering the TMT as a structure of decision-making representation rather than a measure of division of labor.

Perhaps it is this representational role of the TMT as a potential liaison between activity arrangements and decision-making, which Gaba and Joseph ( 2020 ) discuss as information processing, that has led some of the prior research argue that structure influences how decisions come about. Accordingly, decisions of reorganization and internal resource allocation are the result of a political negotiation process (Albert 2018 ; Bidwell 2012 ; Keum 2023 ; Pfeffer 1981 ; Pfeffer and Salancik 1974 ). Hence, this perspective may help understand the role of structure as a process that shapes decisions (Burgelman 1983 ).

Illustration of decision-making representation perspective

Table 2 shows Citigroup’s executive leadership team with each member’s specific job title that reflects the decision-making responsibilities. The team is made up of executives responsible for specific business divisions (e.g., one member carries the title CEO of Legacy Franchises), some members oversee particular geographical regions (e.g., one member carries the title CEO of Latin America), other members represent specific subsidiaries (e.g., one member carries the title CEO of Citibank N.A.), and again others are in charge of corporate functions (e.g., one member carries the title Head of Human Resources).

Table 3 shows Ford’s executive leadership team. The team is made up of executives responsible for business divisions, such as “President Ford Blue”, “CEO, Ford Pro” and “CEO, Ford Next”. In addition, executives represent particular activities of these divisions, such as “Chief Customer Officer, Ford Model e” and “Chief Customer Experience Officer, Ford Blue”. Similar to Citigroup, at Ford executives also represent geographical activities and various functional activities. Moreover, one executive represents a legal entity (Ford Next LLC), which is also a business segment (activity grouping).

Structure as legal entities

This perspective suggests that structure is delineated by legal boundaries, such as discrete subsidiaries that make up an organization’s operating units. This may constitute the most consequential understanding of structure as it relates to containment of legal responsibilities.

Thus, empirical studies have operationalized legal entities as a proxy for divisionalization in organizations (Argyres 1996 ; Zhou 2013 ) and degree of decentralization of research and development responsibilities (Arora et al. 2014 ). The way organizations are legally organized may be motivated by liability concerns, tax advantages, shareholder voting rights, as well as international law and compliance consideration (Bethel and Liebeskind 1998 ). Nevertheless, organizing into legally separate units can have important consequences for the management of the organization, such as limited economies of scope (see ibid.). For example, Monteiro et al. ( 2008 ) describe how subsidiaries in multinational corporations can become “isolated” from knowledge sharing with the rest of the organization. This isolation from intra-firm knowledge flows leads these subsidiaries to more likely underperform compared to less isolated subsidiaries.

It is important to note that legal structure is not always at the discretion of the organization. For example, the financial and economic crisis of 2007/8 has led legislators in some countries to introduce laws that require system-relevant banks to organize certain activities and assets into separate legal entities that contain losses and allow quicker resolvability in case the government decides to step in and take ownership stakes of affected units (Reuters 2014 ).

Legal structures, specifically in the context of multi-national organizations, have been studied with respect to decentralized decision-making, local market adaptation, and dynamics between subsidiaries and the headquarters (Bouquet and Birkinshaw 2008 ). Another aspect of studying legal entities in organizational design relates to internal reorganization. Legally separated activities are not only more straightforward to evaluate (i.e., greater transparency) as they typically maintain their own balance sheets and income statements, but they may also be easier to divest or spin-off, which provides the organization with greater flexibility. For example, the legal reorganization of Google into Alphabet in 2015 legally separated Google’s activities from all its “other bets”, which were run as their own legal organizations, with the goal for greater transparency and accountability (Zenger 2015 ). Moreover, the separation of activities into legal entities may also affect how easy or difficult it is for the organization to endorse cross-unit collaboration and execute internal reorganization without changing legal forms. Coordination cost between separate legal entities are greater, as more formal and legally binding contracts may need to be set.

Illustration of legal entities perspective

Figure  2 shows Citigroup’s legal structure. Accordingly, the organization is at the highest level a Bank Holding Company, which legally owns two (intermediate) holding entities, “Citigroup Global Markets Holdings Inc.” and “Citicorp LLC”. Each of these two entities owns additional subsidiaries, which are largely organized by region (these may hold additional subsidiaries). This structure is quite different from Citigroup’s management of operating activities as none of the business divisions is reflected in the legal structure.

Citigroup material legal entities. This figure is the author’s own drawing and a slight adaptation rom Citigroup’s publicly available presentation material via https://www.citigroup.com/rcs/citigpa/akpublic/storage/public/corp_struct.pdf , accessed on March 23, 2023. The dark blue boxed refer to operating material legal entities. The four boxes that are within the grey dashed rectangle are branches of Citibank N.A

Table 4 shows a list of legal entities reported by Ford in its annual report. Many of these subsidiaries are focused on regional activities and/or credit-related activities, which may be due to regulatory requirements of operating consumer financing activities. The legal entity Ford Next LLC is also its own business segment (i.e., an arrangement of activities reported as a managed division) and directly represented in the executive team. The Ford example does not provide much detail on the exact ownership structure among subsidiaries, which generally is indicative of a legal hierarchical structure of the respective legal entities. However, Ford European Holdings Inc. appears to own European subsidiaries, such as Ford Deutschland Holding GmbH, which in turn is the legal entity that owns subsidiaries in Germany and so on.

A path forward

The study of the commonalities , differences , and relationships between the three perspectives of organization structure—i.e., structure as arrangement of activities, decision-making representation, and legal entities—offers great potential for the field of organizational design. Previous research has often focused on one of these dimensions at a time to study organizational structure, but each perspective plays an important role in organizing and influencing decision-making.

Commonalities

All three perspectives share central ideas of organizational design. First, there is the notion that tasks are grouped and kept separate . The arrangement of activities perspective suggests that economic processes are managed and carried out together when these influence one another. Thus, this perspective stresses the grouping of tasks most forcefully of all the perspectives. However, the two other lines of research also reflect groupings of tasks. The decision-making representation perspective considers job titles and decision-making authority assigned to distinct members of the executive team to generally be related to how tasks are structured. Decision makers, therefore, oversee a particular task environment. The legal entity perspective proposes legal boundaries as delineations of responsibility and accountability. That is, legal separation and containment of financial accountability constitute somewhat binding modularity.

The three views also embrace the concept of hierarchy , albeit manifested differently. The arrangement of activities captures hierarchy by stressing that activity groups (i.e., units) can be nested, that is, a division is made up of several sub-units with own task responsibilities. Hierarchy in decision-making representation is captured by reporting lines and may be more focused on hierarchy as a means of conflict resolution and the diffusion of top-down ideas. The legal entity view shares similarity with the arrangement of activities perspective in that nested structures of subsidiaries can exist, but the “mechanism” of hierarchy is the ownership structure.

Differences

While the three perspectives have obvious similarities and overlap—after all, that is why scholars rely on one or the other perspectives to proxy organizational structure—these perspectives also capture distinct elements and, therefore, draw attention to different theoretical aspects of organization structure. The arrangement of activities perspective draws attention to the locus of value creation and innovation associated with structure. The grouping of activities influences whether synergies can be realized, goals achieved more quickly (Raveendran 2020 ) and whether knowledge can be recombined to seize innovation opportunities (Karim and Kaul 2014 ). The representation of decision-making perspectives draws attention to the top management team as structural authority to resolve conflicts between lower-level decision makers, and lobby for distinct operating activities in the organization. Moreover, top management plays a crucial role in the restructuring of the arrangement of activities and decisions with respect to changing the composition of legal entities. For example, political power of executives has been argued and shown to affect division reorganization decisions (Albert 2018 ) and allocation decisions of internal non-financial resources (Keum 2023 ). Finally, the legal entities perspective draws attention to structure as legal accountability and draws a sharp line between what is truly separate and what is more ‘loosely’ integrated. Consequently, arranging activities as legally separate entities often requires more costly coordination measures, such as formal contracts.

Theoretical and empirical questions around these differences may investigate the following claims.

A research focus on organizational structure as arrangement of activities may be of particular interest for the aim of understanding performance and innovation outcomes as economic activities are directly related to the process of value creation.

A research focus on organizational structure as decision-making representation may be of particular interest for the aim of understanding how strategic goals are formed, with respect to change and associated corporate reorganizations.

A research focus on organizational structure as legal entities may be of particular interest for the aim of understanding barriers to integration and realization of synergies as well as flexibility with respect to changes in corporate scope.

However, these preliminary statements about the different perspectives on organizational structure are not meant to encourage researchers to keep them strictly separate. Instead, future studies can explore these perspectives' theoretical relationships, offering wonderful opportunities for new insights, as will be discussed next.

Relationships

By investigating underlying connections between the different perspectives, future research may surface important insights about organizational design that can open up entirely new research programs. An essential theoretical question involves whether there are any directional relationships between specific perspectives. For example, when does top management team structure induce or follow other changes (in divisions and legal structure)? Karim and Williams ( 2012 ) show that changes in executives’ division responsibilities helps predict subsequent reorganizations in the respective units. Another question is how the legal structure may affect the arrangement of activities over time. The greater cost of integration of legally separate entities may imply that greater autonomy is more likely to follow, which future research may want to investigate.

Moreover, it would be useful for the field of organizational design to better understand when potential structural changes in divisions and legal entities trigger in turn a reorganization of leadership responsibilities. The legal structure may change much more slowly than the other two types, because of regulatory and other legal reasons. Nevertheless, the legal structure can play an essential role in how the organization lays out its strategic priorities, is internally managed, and evaluates its performance. At least, these appear to be the main reasons of notable reorganization that lead to an overhaul in legal structure. Recent examples include the already mentioned case of Google’s legal reorganization into contained group subsidiaries under the Alphabet umbrella, Facebook’s legal reorganization into the corporation Meta (Zuckerberg 2021 ), and Lego’s reorganization into the Lego Brand Group (LEGO Group 2016 ). The question remains whether the legal reorganization is a means to enable better top management and divisional structures or whether the top management structure, for example, motivated such legal changes for better alignment.

Finally, a completely novel question that acknowledges the multifaceted perspectives of organizational structure emerges. What are the performance, innovation, and strategic change consequences for organizations when these different perspectives are aligned or misaligned? Are there specific “archetypes” organizational structures along these dimensions?

Implications

It is important to stress that in some cases it may be necessary to draw upon two or all three to gain a more holistic picture of organizational structure and important nuances that may be highly specific to a particular organization. Whereas the arrangement of activities provides an overview of distinct operating units, such as divisions and subunits, this perspective alone does not capture complex interrelationships with respect to who reports to whom. This becomes most critical in cases of a matrix organization, where, for example, a segment is guided by a product goal as well as some geographical goals.

Moreover, a comparison of some of the organizational structure characteristics between Citigroup and Ford demonstrates how important, potentially strategy-influencing differences exist when consulting all three perspectives. For example, the fact that Ford’s executive team is in part made up of executives who represent a specific legal entity, which is its own reporting segment, suggests that legal structure, decision-making and value creation for certain parts of the organization go hand in hand. In contrast, Citigroup’s legal structure bears little to no resemblance to its operational structure. This may suggest that in Citigroup’s case legal entities play a very different role for organizational design purposes, such as containing legal regulatory requirements and legal containment of liability, whereas its management of value creating activities and decision-making responsibilities is guided across these legal boundaries. Concluding that the legal structure is a reflection of operational and strategic design may be somewhat misdirected with respect to product-market operations but more reflective of risk and geographical profiles in Citigroup’s case. Future research is encouraged to explore such differences in more detail.

Limitations

Before concluding this point of view paper, it is important to acknowledge that there are other important attributes of organizational design and structure that should be considered. For example, the leadership perspective of structure may be extended or complemented by considering the structure of corporate governance and its effects on organizational changes (Castañer and Kavadis 2013 ; Goranova et al. 2007 ). Moreover, the arrangement of activities into departments, units, and divisions determines the formal structure of the organization. Employees who belong to the same department (and work on the same task) often work in the same physical location and, therefore, are more likely to interact (including outside their formal task) and form (informal) networks with those close to them (Clement and Puranam 2018 ). As such, the structure of tasks can affect the emergence of networks in the organization. Organizational changes to the arrangement of activities may consequently conflict with the informal structure that has formed over time (Gulati and Puranam 2009 ). Informal networks in the organization may, therefore, constitute another “measure” of structure, but this paper takes the perspective that networks are a more likely to be a consequence of organizational structure (albeit one that may affect future structures).

Finally, organizational design can exceed a focal firm’s boundaries. Partnerships, such as alliances, joint ventures, and meta-organizations (Gulati et al. 2012 ), pose additional challenges in determining the actual structure of an organization. Future research is advised to study how different dimensions of organizational structure extend to and impact such boundary-spanning multi-organization designs.

The divergence in prior literature with respect to conceptualizing and operationalizing organizational structure reveals that this construct has more facets to it than sometimes acknowledged. Studying the alignment and divergence of these three characteristics of structure within organizations has potential to qualify and complement prior theories and generate new insights with respect to nuances of organizational design that we may have overlooked in prior work. It is important to consider that focusing only on one of these dimensions at a time for studying structure can indeed be sufficient. However, the field of organizational design may wish to be more concise in which perspective is chosen and why, when building, testing, and extending theory. Highlighting what is not measured following a particular perspective can already enrich our understanding of the role of organizational structure in novel and impactful ways.

Data availability

Data used in this manuscript are publicly accessible through regulatory filings and company Investor Relations websites.

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Acknowledgements

I appreciate the helpful comments and guidance provided by the handling editor-in-chief Marlo Raveendran and two anonymous reviewers. I also would like to thank all three editors-in-chief for supporting the publication of this point of view manuscript.

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Albert, D. What do you mean by organizational structure? Acknowledging and harmonizing differences and commonalities in three prominent perspectives. J Org Design 13 , 1–11 (2024). https://doi.org/10.1007/s41469-023-00152-y

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Received : 30 March 2023

Accepted : 12 September 2023

Published : 11 October 2023

Issue Date : March 2024

DOI : https://doi.org/10.1007/s41469-023-00152-y

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• Section 1. Organizational Structure: An Overview

Chapter 9 Sections

• Section 2. Creating and Gathering a Group to Guide Your Initiative
• Section 3. Developing Multisector Task Forces or Action Committees for the Initiative
• Section 4. Developing an Ongoing Board of Directors
• Section 5. Welcoming and Training New Members to a Board of Directors
• Section 6. Maintaining a Board of Directors
• Section 7. Writing Bylaws
• Section 8. Including Youth on Your Board, Commission, or Committee
• Section 9. Understanding and Writing Contracts and Memoranda of Agreement

• Main Section

What is organizational structure?

Why should you develop a structure for your organization, when should you develop a structure for your organization.

By structure, we mean the framework around which the group is organized, the underpinnings which keep the coalition functioning. It's the operating manual that tells members how the organization is put together and how it works. More specifically, structure describes how members are accepted, how leadership is chosen, and how decisions are made.

• Structure gives members clear guidelines for how to proceed. A clearly-established structure gives the group a means to maintain order and resolve disagreements.
• Structure binds members together. It gives meaning and identity to the people who join the group, as well as to the group itself.
• Structure in any organization is inevitable -- an organization, by definition , implies a structure. Your group is going to have some structure whether it chooses to or not. It might as well be the structure which best matches up with what kind of organization you have, what kind of people are in it, and what you see yourself doing.

It is important to deal with structure early in the organization's development. Structural development can occur in proportion to other work the organization is doing, so that it does not crowd out that work. And it can occur in parallel with, at the same time as, your organization's growing accomplishments, so they take place in tandem, side by side. This means that you should think about structure from the beginning of your organization's life. As your group grows and changes, so should your thinking on the group's structure.

Elements of Structure

While the need for structure is clear, the best structure for a particular coalition is harder to determine. The best structure for any organization will depend upon who its members are, what the setting is, and how far the organization has come in its development.

Regardless of what type of structure your organization decides upon, three elements will always be there. They are inherent in the very idea of an organizational structure.

• Some kind of governance

Rules by which the organization operates

• A distribution of work

The first element of structure is governance - some person or group has to make the decisions within the organization.

Another important part of structure is having rules by which the organization operates. Many of these rules may be explicitly stated, while others may be implicit and unstated, though not necessarily any less powerful.

Distribution of work

Inherent in any organizational structure also is a distribution of work. The distribution can be formal or informal, temporary or enduring, but every organization will have some type of division of labor.

There are four tasks that are key to any group:

• Envisioning desired changes . The group needs someone who looks at the world in a slightly different way and believes he or she can make others look at things from the same point of view.
• Transforming the community . The group needs people who will go out and do the work that has been envisioned.
• Planning for integration . Someone needs to take the vision and figure out how to accomplish it by breaking it up into strategies and goals.
• Supporting the efforts of those working to promote change . The group needs support from the community to raise money for the organization, champion the initiative in the state legislature, and ensure that they continue working towards their vision.

Common Roles

Every group is different, and so each will have slightly different terms for the roles individuals play in their organization, but below are some common terms, along with definitions and their typical functions.

• An initial steering committee is the group of people who get things started. Often, this group will create plans for funding, and organizational and board development. It may also generate by-laws, and then dissolve. If they continue to meet after approximately the first six months, we might say they have metamorphosed into a coordinating council .
• A coordinating council (also referred to as a coordinating committee, executive committee , and executive council ), modifies broad, organization-wide objectives and strategies in response to input from individuals or committees.
• Often, one person will take the place of the coordinating council, or may serve as its head. Such a person may be known as the Executive Director, Project Coordinator, Program Director, or President . He or she sometimes has a paid position, and may coordinate, manage, inspire, supervise, and support the work of other members of the organization.
• Task forces are made up of members who work together around broad objectives. Task forces integrate the ideas set forward with the community work being done.

For example, from the director of a coalition to reduce violence in a medium-sized city: "Currently, we have three operational task forces. Members of each have an ongoing dialogue with members of the coordinating council, and also with their action committees. The oldest was formed with the goal of eliminating domestic violence about fifteen years ago, when a local woman was killed by her husband. Then, after several outbreaks of violence in the schools a few years back, our group offered to help, and a second task force sprung up around reducing youth violence. We've just started a third, with the goal of increasing gun safety. "All of it is interrelated, and all of it applies to our mission of increasing the safety of residents of South Haven, as well as that of our visitors. But each task force is contributing to that mission in vastly different ways, with different objectives, and using different strategies. 'Cause, you know, the strategies you use to stop a ninth grader from bringing a gun to school just aren't the same as the ones you use to stop a 40-year-old man on unemployment from beating his wife."

•   Action committees bring about specific changes in programs, policies, and practices in the sectors in which they work.

For example, the task force on domestic violence mentioned above has the following action committees: A government and law enforcement committee . Members include police officers, lawyers, a judge, and a state representative. Currently, they are trying to pass laws with stronger penalties for those convicted of domestic violence, especially repeat offenders. They are also training officers to be better able to spot an abusive relationship, and better able to inform a victim of his or her options. A social services committee . Members (who include representatives from most of the service agencies in town) work to assure that staff members know where to send someone for the resources he or she needs. They are also trying to increase the number of trained volunteer counselors who work at the battered women's shelter. A media committee . Members include local journalists, writers, and graphic designers. They keep the project and the issue in the public's minds as much as possible with editorials, articles and news clips of events, as well as advertisements and public service announcements.

•   Support committees are groups that help ensure that action committees or other individuals will have the resources and opportunities necessary to realize their vision. Financial and media committees are examples of committees formed to help support or facilitate your work.
• Community trustees , also known as the board of trustees or as the board of directors , provide overall support, advice, and resources to members of the action groups. They are often either people who are directly affected by the issue or have stature in the community. That way, they are able to make contacts, network with other community leaders, and generally remove or weaken barriers to meeting organizational objectives.
• Grantmakers are another part of the picture. Grantmakers exist on an international, national, state, and local level and may be private companies and foundations, or local, county, state, or federal government organizations (for example, block grants given by the city would fall into this category).
• Support organizations (not to be confused with the support committees listed above) are groups that can give your organization the technical assistance it needs.
• Partner organizations are other groups working on some of the same issues as your organization.

Although this list is pretty extensive, your organization may only use two or three of the above mentioned roles, especially at the beginning. It's not uncommon for a group to start with a steering committee, ask others to serve as board members, and then recruit volunteers who will serve as members of action committees. In this broad spectrum of possibilities, consider: Where does your organization fit in? Where do you want to be?

Examples of Structure

So how can all of these pieces be put together? Again, the form a community group takes should be based on what it does , and not the other way around. The structures given are simply meant to serve as examples that have been found to be effective for some community-based organizations; they can and should be adapted and modified for your own group's purposes.

  A relatively complex structure

Example - The Ste. Genevieve's Children's Coalition The Ste. Genevieve's Children's Coalition is a relatively large community-based group. They have a coordinating council, a media committee, and three task forces, dealing with adolescent pregnancy, immunization, and child hunger. Each of the task forces has action committees as well. For example, the adolescent pregnancy reduction task force has a schools committee that focuses on keeping teen parents in school and modifying the human sexuality curriculum. A health organizations committee focuses on increasing access and use of the youth clinic. The media committee works to keep children's issues in the news, and includes professionals from the local television stations, radio stations, newspaper, and a marketing professional. The coordinating council is composed of the executive director, her assistant, the media committee chair, and the chairs of each of the three task forces. A board of directors has been invaluable in helping keep the coalition financially viable.

In diagram form, a complex organization might look like this:

And in diagram form:

As smaller size means fewer people, these groups are usually less complex, as they have less need for a formal hierarchy and instead have governance that is consensus-based. A diagram of such a small group might look something like this, with each of the circles representing an individual member:

What type of structure should you choose?

First, decide upon the formality your organization will have. The following table, adapted from The Spirit of Coalition Building can help you make this first decision.

Organizational structure is something that is best decided upon internally, through a process of critical thinking and discussion by members of the group.

In your discussions, your answers to the following list of questions may guide your decisions.

• What is your common purpose? How broad is it? Groups with broader purposes often have more complicated structures, complete with many layers and parts, than do groups with more narrow purposes.
• Is your group advocacy oriented or service oriented? Service organizations use "top down," one-person-in-charge structure much more often than do advocacy based groups.
• Is your organization more centralized (e.g., through the work of a specific agency ) or decentralized (e.g., different neighborhoods working independently on the same problem)? A decentralized group might find a "top-down" structure inappropriate, as such a group often has several peers working together on an issue.
• How large is your organization? How large do you envision it becoming? A very small organization may wish to remain relatively informal, while a community-wide group might require a more formal structure. A related question, with similar consequences, is:
• How large is the community in which you work?
• How old is your organization? How long do you envision it lasting? A group formed to resolve a single issue might not need a formal structure at all, while an organization with long-term goals may want something more concrete, with clearer divisional responsibilities and authority.
• Is the organization entirely volunteer, or are there (or will there be) paid staff? How many? An organization with many paid staff members may find it more necessary to have people "in charge," as there are generally more rules and responsibilities for paid staff members, and thus, there must be more supervision in carrying out these roles.
• Should yours be a new organization, or part of an existing structure? Do you really need to form a new structure, or would it be better to work within existing structures? Sometimes, your goals may be better met if you are part of (or linked with) another organization.

Structure is what ensures that your organization will function smoothly and as you intended. You should think about structure early in the development of your organization, but be aware that the type that fits best may change as your organization grows.

Online Resources

How to Develop an Organization Structure , by Tara Duggan, Demand Media, is an informational article on how to develop organization structure with a short step-by-step analysis.

It's All About the Base: A Guide to Building a Grassroots Organizing Program   from Community Catalyst.

Module 2: Organizational Structure , by Pathfinder International, is a concise manual describing pros and cons, together with suggestions for how one might change the organizational structure one has.

Print Resources

Berkowitz, W., & Wolff, T. (1999). The spirit of coalition building. Washington , DC: American Public Health Association.

Unterman, I. & Davis, R. (1984). Strategic management of not-for-profit organizations: From survival to success . New York, NY: Praeger.

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The Importance of Organizational Design and Structure

• Gill Corkindale

One of the wonderful things about being a coach is that I meet hundreds of executives who freely share their business and leadership challenges with me. As well as helping me understand how hard it is to run an organization, they show me how they are managing to adapt — or not — to changing […]

One of the wonderful things about being a coach is that I meet hundreds of executives who freely share their business and leadership challenges with me. As well as helping me understand how hard it is to run an organization, they show me how they are managing to adapt — or not — to changing organizational structures .

• Gill Corkindale is an executive coach and writer based in London, focusing on global management and leadership. She was formerly management editor of the Financial Times.

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Organizational Structure

Organizational structure can be defined as a system for outlining management roles and responsibilities to achieve organizational goals. Organizational structure also determines the pattern of information flow within the organization. For instance, in highly hierarchical structures decisions are communicated from top to down, whereas in flat structures the power for decision making is distributed among various levels.

Organizational structure aims to provide efficiency and focus to operations. Appropriate structure should illustrate how the roles and responsibilities of each employee fit within the overall system.

Organizational structure has the following four main elements:

• Chain of command. Illustrating who reports to whom via an organizational chart.
• Defining departments . Clustering tasks, roles and responsibilities into groups and defining connections between various groups.
• Extend of control . Categorizing each and every task into departments to avoid a situation where two or more people do the same task.
• Centralization . Identifying the levels where decisions are made.

There are four main types of organizational structures – functional, divisional, flat and matrix.

Functional Structure

Functional structure is based on specialization of employees and it is the most common organizational structure. It is also referred to as bureaucratic structure and divides company into various departments such as procurement, operations, marketing , finance etc.

Divisional Structure

Divisional structure is also popular and it divides to company into various divisions on the basis of products, projects or subsidiaries.

Flat Structure

Flat structure, also referred to as horizontal structure aims to minimize the chain of command providing employees with autonomy in decision making.  This pattern is popular among startups.

Matrix Organizational Structure

Matrix structure is the most complex and accordingly, the least popular. Matrix structure assigns employees across various divisions and supervisors. Employees in such a structure may belong to more than one divisions and report to several superiors.

In this portal you can find analysis of organizational structure of major international companies.

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Organizational Structure Explained: A Comprehensive Guide for Businesses

Discover the different organizational structures, their benefits, and how they can shape your company's success in 2024 and beyond.

Organizational structure aligns and relates parts of an organization, so it can achieve its maximum performance. The structure chosen affects an organization's success in carrying out its strategy and objectives. Leadership should understand the characteristics, benefits and limitations of various organizational structures to assist in this strategic alignment.

Overview Background Business Case Key Elements of Organizational Structures Types of Organizational Structures

Vertical structures (functional and divisional)

Matrix organizational structures, open boundary structures (hollow, modular virtual and learning).

The Impact of Growth Stages on Organizational Structure Metrics Communications and Technology Global Issues Legal Issues

This article addresses the following topics related to organizational structure:

• The case for aligning organizational structure with the enterprise's business strategy.
• Key elements of organizational structure.
• Types of organizational structures and the possible benefits and limitations of each.
• The impact of an organization's stage of development on its structure.
• Communications, technology, metrics, global and legal issues.

Organizational structure is the method by which work flows through an organization. It allows groups to work together within their individual functions to manage tasks. Traditional organizational structures tend to be more formalized—with employees grouped by function (such as finance or operations), region or product line. Less traditional structures are more loosely woven and flexible, with the ability to respond quickly to changing business environments.

Organizational structures have evolved since the 1800s. In the Industrial Revolution, individuals were organized to add parts to the manufacture of the product moving down the assembly line. Frederick Taylor's scientific management theory optimized the way tasks were performed, so workers performed only one task in the most efficient way. In the 20th century, General Motors pioneered a revolutionary organizational design in which each major division made its own cars.

Today, organizational structures are changing swiftly—from virtual organizations to other flexible structures. As companies continue to evolve and increase their global presence, future organizations may embody a fluid, free-forming organization, member ownership and an entrepreneurial approach among all members. See  Inside Day 1: How Amazon Uses Agile Team Structures and Adaptive Practices to Innovate on Behalf of Customers .

Business Case

A hallmark of a well-aligned organization is its ability to adapt and realign as needed. To ensure long-term viability, an organization must adjust its structure to fit new economic realities without diminishing core capabilities and competitive differentiation. Organizational realignment involves closing the structural gaps impeding organizational performance.

Problems created by a misaligned organizational structure

Rapid reorganization of business units, divisions or functions can lead to ineffective, misaligned organizational structures that do not support the business. Poorly conceived reorganizations may create significant problems, including the following:

• Structural gaps in roles, work processes, accountabilities and critical information flows can occur when companies eliminate middle management levels without eliminating the work, forcing employees to take on additional responsibilities.
• Diminished capacity, capability and agility issues can arise when a) lower-level employees who step in when middle management is eliminated are ill-equipped to perform the required duties and b) when higher-level executives must take on more tactical responsibilities, minimizing the value of their leadership skills.
• Disorganization and improper staffing can affect a company's cost structure, cash flow and ability to deliver goods or services. Agile organizations can rapidly deploy people to address shifting business needs. With resources cut to the bone, however, most organizations' staff members can focus only on their immediate responsibilities, leaving little time, energy or desire to work outside their current job scope. Ultimately, diminished capacity and lagging response times affect an organization's ability to remain competitive.
• Declining workforce engagement can reduce retention, decrease customer loyalty and limit organizational performance and stakeholder value.

The importance of aligning the structure with the business strategy

The key to profitable performance is the extent to which four business elements are aligned:

Leadership. The individuals responsible for developing and deploying the strategy and monitoring results.

Organization. The structure, processes and operations by which the strategy is deployed.

Jobs. The necessary roles and responsibilities.

People. The experience, skills and competencies needed to execute the strategy.

An understanding of the interdependencies of these business elements and the need for them to adapt to change quickly and strategically are essential for success in the high-performance organization. When these four elements are in sync, outstanding performance is more likely.

Achieving alignment and sustaining organizational capacity requires time and critical thinking. Organizations must identify outcomes the new structure or process is intended to produce. This typically requires recalibrating the following:

• Which work is mission-critical, can be scaled back or should be eliminated.
• Existing role requirements, while identifying necessary new or modified roles.
• Key metrics and accountabilities.
• Critical information flows.
• Decision-making authority by organization level.

See  Meeting the Challenges of Developing Collaborative Teams for Future Success.

Key Elements of Organizational Structures

Five elements create an organizational structure: job design, departmentation, delegation, span of control and chain of command. These elements comprise an organizational chart and create the organizational structure itself. "Departmentation" refers to the way an organization structures its jobs to coordinate work. "Span of control" means the number of individuals who report to a manager. "Chain of command" refers to a line of authority.

The company's strategy of managerial centralization or decentralization also influences organizational structures. "Centralization," the degree to which decision-making authority is restricted to higher levels of management, typically leads to a pyramid structure. "Centralization" is generally recommended when conflicting goals and strategies among operating units create a need for a uniform policy. "Decentralization," the degree to which lower levels of the hierarchy have decision-making authority, typically leads to a leaner, flatter organization. Decentralization is recommended when conflicting strategies, uncertainty or complexity require local adaptability and decision-making.

Types of Organizational Structures

Organizational structures have evolved from rigid, vertically integrated, hierarchical, autocratic structures to relatively boundary-less, empowered, networked organizations designed to respond quickly to customer needs with customized products and services.

Today, organizations are usually structured vertically, vertically and horizontally, or with open boundaries. Specific types of structures within each of these categories are the following:

• Vertical — functional and divisional.
• Vertical and horizontal — matrix.
• Boundary-less (also referred to as "open boundary")—modular, virtual and cellular.

See  What are commonly-used organization structures?

Two main types of vertical structure exist, functional and divisional. The functional structure divides work and employees by specialization. It is a hierarchical, usually vertically integrated, structure. It emphasizes standardization in organization and processes for specialized employees in relatively narrow jobs.

This traditional type of organization forms departments such as production, sales, research and development, accounting, HR, and marketing. Each department has a separate function and specializes in that area. For example, all HR professionals are part of the same function and report to a senior leader of HR. The same reporting process would be true for other functions, such as finance or operations.

In functional structures, employees report directly to managers within their functional areas who in turn report to a chief officer of the organization. Management from above must centrally coordinate the specialized departments. 

A functional organizational chart might look something like this: 

Advantages of a functional structure include the following:

• The organization develops experts in its respective areas.
• Individuals perform only tasks in which they are most proficient.
• This form is logical and easy to understand.

Disadvantages center on coordination or lack thereof:

• People are in specialized "silos" and often fail to coordinate or communicate with other departments.
• Cross-functional activity is more difficult to promote.
• The structure tends to be resistant to change.

This structure works best for organizations that remain centralized (i.e., a majority of the decision-making occurs at higher levels of the organization) because there are few shared concerns or objectives between functional areas (e.g., marketing, production, purchasing, IT). Given the centralized decision-making, the organization can take advantage of economies of scale in that there are likely centralized purchasing functions.

An appropriate management system to coordinate the departments is essential. The management system may be a special leader, like a vice president, a computer system or some other format.

Also a vertical arrangement, a divisional structure most often divides work and employees by output, although a divisional structure could be divided by another variable such as market or region. For example, a business that sells men's, women's and children's clothing through retail, e-commerce and catalog sales in the Northeast, Southeast and Southwest could be using a divisional structure in one of three ways:

• Product—men's wear, women's wear and children's clothing.
• Market—retail store, e-commerce and catalog.
• Region—Northeast, Southeast and Southwest.

A divisional organizational structure might look like this:

The advantages of this type of structure are the following:

• It provides more focus and flexibility on each division's core competency.
• It allows the divisions to focus on producing specialized products while also using knowledge gained from related divisions.
• It allows for more coordination than the functional structure.
• Decision-making authority pushed to lower levels of the organization enables faster, customized decisions.

The disadvantages of this structure include the following:

• It can result in a loss of efficiency and a duplication of effort because each division needs to acquire the same resources.
• Each division often has its own research and development, marketing, and other units that could otherwise be helping each other.
• Employees with similar technical career paths have less interaction.
• Divisions may be competing for the same customers.
• Each division often buys similar supplies in smaller quantities and may pay more per item.

This type of structure is helpful when the product base expands in quantity or complexity. But when competition among divisions becomes significant, the organization is not adapting quickly enough, or when economies of scale are lacking, the organization may require a more sophisticated matrix structure.

A matrix structure combines the functional and divisional structures to create a dual-command situation. In a matrix structure, an employee reports to two managers who are jointly responsible for the employee's performance. Typically, one manager works in an administrative function, such as finance, HR, information technology, sales or marketing, and the other works in a business unit related to a product, service, customer or geography.

A typical matrix organizational structure might look like this:

Advantages of the matrix structure include the following:

• It creates a functional and divisional partnership and focuses on the work more than on the people.
• It minimizes costs by sharing key people.
• It creates a better balance between time of completion and cost.
• It provides a better overview of a product that is manufactured in several areas or sold by various subsidiaries in different markets.

Disadvantages of matrix organizations include the following:

• Responsibilities may be unclear, thus complicating governance and control.
• Reporting to more than one manager at a time can be confusing for the employee and supervisors.
• The dual chain of command requires cooperation between two direct supervisors to determine an employee's work priorities, work assignments and performance standards.
• When the function leader and the product leader make conflicting demands on the employee, the employee's stress level increases, and performance may decrease.
• Employees spend more time in meetings and coordinating with other employees.

These disadvantages can be exacerbated if the matrix goes beyond two-dimensional (e.g., employees report to two managers) to multidimensional (e.g., employees report to three or more managers).

Matrix structures are common in heavily project-driven organizations, such as construction companies. These structures have grown out of project structures in which employees from different functions formed teams until completing a project, and then reverted to their own functions. In a matrix organization, each project manager reports directly to the vice president and the general manager. Each project is, in essence, a mini profit center, and therefore, general managers usually make business decisions.

The matrix-structured organization also provides greater visibility, stronger governance and more control in large, complex companies. It is also well suited for development of business areas and coordination of complex processes with strong dependencies.

Matrix structures pose difficult challenges for professionals charged with ensuring equity and fairness across the organization. Managers working in matrix structures should be prepared to intervene via communication and training if the structure compromises these objectives. Furthermore, leadership should monitor relationships between managers who share direct reports. These relationships between an employee's managers are crucial to the success of a matrix structure.

More recent trends in structural forms remove the traditional boundaries of an organization. Typical internal and external barriers and organizational boxes are eliminated, and all organizational units are effectively and flexibly connected. Teams replace departments, and the organization and suppliers work as closely together as parts of one company. The hierarchy is flat; status and rank are minimal. Everyone—including top management, managers and employees—participates in the decision-making process. The use of 360-degree feedback performance appraisals is common as well.

Advantages of boundary-less organizations include the following:

• Ability to leverage all employees' talents.
• Faster response to market changes.
• Enhanced cooperation and information sharing among functions, divisions and staff.

Disadvantages include the following:

• Difficulty in overcoming silos inside the organization.
• Lack of strong leadership and common vision.
• Time-consuming processes.
• The possibility of employees being adversely affected by efficiency efforts.
• The possibility of organizations abandoning change if restructuring does not improve effectiveness quickly.

Boundary-less organizational structures can be created in varied forms, including hollow, modular and virtual organizations.

Hollow organizations. Hollow structures divide work and employees by core and noncore competencies. Hollow structures are an outsourcing model in which the organization maintains its core processes internally but outsources noncore processes. Hollow structures are most effective when the industry is price competitive and choices for outsourcing exist. An example of a hollow structure is a sports organization that has its HR functions (e.g., payroll and benefits) handled by outside organizations.

Advantages of this type of structure include the following:

• Minimizing overhead.
• Enabling the organization to focus on its core product and eliminating the need to develop expertise in noncore functions.

Disadvantages include:

• Loss of control over functions that affect employees regularly.
• Restriction by certain industries (e.g., health care) on the extent of outsourcing.
• Lack of competitive outsourcing options.

Modular organizations. Modular structures differ from hollow organizations in that components of a product are outsourced. Modular structures may keep a core part of the product in-house and outsource noncore portions of the product. Networks are added or subtracted as needs change. For a modular structure to be an option, the product must be able to be broken into chunks. For example, computer manufacturer Dell buys parts from various suppliers and assembles them at one central location. Suppliers at one end and customers at the other become part of the organization; the organization shares information and innovations with all. Customization of products and services results from flexibility, creativity, teamwork and responsiveness. Business decisions are made at corporate, divisional, project and individual team member levels.

Advantages include the following:

• Minimizing the specialization and specialists needed.
• Enabling the company to outsource parts supply and coordinate the assembly of quality products.

Disadvantages include concerns about the actions of suppliers outside the control of the core management company. Risk occurs if the partner organization removes itself form the quality check on the end product or if the outsourced organization uses a second outsourced organization. Examples of supplier concerns include the following:

• Suppliers, or subcontractors, must have access to—and safeguard—most, if not all, of the core company's data and trade secrets.
• Suppliers could suddenly raise prices on or cease production of key parts.
• Knowing where one organization ends and another begins may become difficult.

Virtual organizations. A virtual organization (sometimes called a network structure) is cooperation among companies, institutions or individuals delivering a product or service under a common business understanding. Organizations form partnerships with others—often competitors—that complement each other. The collaborating units present themselves as a unified organization.

The advantages of virtual structures include the following:

• Contributions from each part of the unit.
• Elimination of physical boundaries.
• Responsiveness to a rapidly changing environment.
• Lower or nonexistent organizational overhead.
• Allows companies to be more flexible and agile.
• Give more power to all employees to collaborate, take initiative, and make decisions.
• Helps employees and stakeholders understand workflows and processes.

The disadvantages of virtual organizations include the following:

• Potential lack of trust between organizations.
• Potential lack of organizational identification among employees.
• Need for increased communication.
• Can quickly become overly complex when dealing with lots of offsite processes.
• Can make it more difficult for employees to know who has final say.

Virtual structures are collaborative and created to respond to an exceptional and often temporary marketing opportunity. An example of a virtual structure is an environmental conservancy in which multiple organizations supply a virtual organization with employees to save, for example, a historic site, possibly with the intent of economic gain for the partners.

Understanding the organizational environment is crucial in open boundary models. For example, some industries cannot outsource noncore processes due to government regulation. (For example, health insurance organizations may be unable to outsource Medicare processes). Or, in some cases, outsourcing may have to be negotiated with a union.

The key to effective boundary-less organizations is placing adaptable employees at all levels. Management must give up traditional autocratic control to coach employees toward creativity and the achievement of organizational goals. Employees must apply initiative and creativity to benefit the organization, and reward systems should recognize such employees.

Learning organizations. A learning organization is one whose design actively seeks to acquire knowledge and change behavior as a result of the newly acquired knowledge. In learning organizations, experimenting, learning new things, and reflecting on new knowledge are the norms. At the same time, there are many procedures and systems in place that facilitate learning at all organization levels.

The advantages of learning organizations include the following:

• Open communication and information sharing.
• Innovativeness
• Ability to adapt to rapid change.
• Strong organizational performance.
• Competitive advantage.

The disadvantages of learning organizations include the following:

• Power difference is ignored.
• Process of implementing will be complicated and take longer.
• Fear of employee participation in organizational decisions.
• Breaking of existing organizational rules.

The Impact of Growth Stages on Organizational Structure

Organizations typically mature in a consistent and predictable manner. As they move through various stages of growth, they must address various problems. This process creates the need for different structures, management skills and priorities.

The four stages of development in an organization's life cycle include the following:

The beginning stage of development is characterized by an inconsistent growth rate, a simple structure and informal systems. At this stage the organization is typically highly centralized. "Dotcom" companies are a good example of startup companies.

The expansion stage is evidenced by rapid, positive growth and the emergence of formal systems. Organizations at this stage typically focus on centralization with limited delegation.

Consolidation

The consolidation stage is characterized by slower growth, departmentalization, formalized systems and moderate centralization.

Diversification

The diversification stage occurs when older, larger organizations experience rapid growth, bureaucracy and decentralization.

As an organization grows or passes from one stage of development to another, carefully planned and well-conceived changes in practices and strategies may be necessary to maximize effectiveness. There are no guarantees that an organization will make it from one stage to the next. In fact, a key opportunity for leadership is to recognize indicators that suggest an organization is in a risky or unhealthy stage and to make appropriate structural adjustments.

The art of organizational design is assessing the environment's essential aspects and their meaning for the organization's future. Translating those characteristics into the right structure is critical to increasing efficiency and controlling costs. When selecting the best structure for the organization, company leaders should examine and evaluate current key structural dimensions and contextual factors. See  How do I determine which HR metrics to measure and report?

Structural dimensions

Leaders can develop an understanding of the organization's internal environment through measurement and analysis of its structural dimensions. Key dimensions, which are usually measured through a survey, include:

Specialization. The extent to which an organization's activities are divided into specialized roles.

Standardization. The degree to which an organization operates under standard rules or procedures.

Formalization. The extent to which instructions and procedures are documented.

Centralization. The degree to which leaders at the top of the management hierarchy have authority to make certain decisions.

Configuration. The shape of the organization's role structure, which includes:

• Chain of command. The number of vertical levels or layers on the organizational chart.
• Span of control. The number of direct reports per manager or the number of horizontal levels or layers on the organizational chart.

Contextual factors

A review of contextual factors will provide a better understanding of the external environment and the relationship between the internal and external environment. Some of the significant contextual factors to consider in this review include:

Origin and history. Was the organization privately founded? What changes have occurred in ownership or location?

Ownership and control. Is the organization private or public? Is control divided among a few individuals or many?

Size. How many employees does the organization have? What are its net assets? What is its market position?

Location. How many operating sites does the organization maintain?

Productsand services. What types of goods and services does the organization manufacture and provide?

Technology. Are the organization's work processes effectively integrated?

Interdependence. What is the degree to which the organization depends on customers, suppliers, trade unions or other related entities?

After examining the structural dimensions and contextual factors and developing an understanding of the connection between an organization's structure and strategy, organization leaders can consider alternative structures. They may use diagnostic models and tools to guide the design process.

Communications and Technology

The last few years have seen an unprecedented expansion and improvement of online communication. Software has pushed the boundaries of workplace communication beyond e-mail into collaborative social media platforms and innovative intranets. The decline in traditional communication methods and the dramatic increase in cyber communication has had a major impact on the workplace and is leading to restructuring.

As organizations continue to restructure to remain competitive, communications can drive the transition to an effective new organizational structure. Research suggests that companies can positively affect their credibility with employees through various organizational communication programs.

In establishing internal communication channels, leadership must be aware of the advantages and shortcomings of communication technologies and match them to the organization's needs, strategic goals and structure. Employers should also be cognizant of, and be prepared to deal with, the common communication challenges in various organizational structures. For example, communications technology has enabled organizations to create virtual workplaces and teams. In a virtual team, members from various geographical locations work together on a task, communicating via e-mail, instant messaging, teleconferencing, videoconferencing and web-based workspaces.

Although virtual teams have significant advantages—most notably reduced travel costs and flexibility in staffing and work schedules—they also pose challenges. Virtual teams often find coordinating team logistics and mastering new technologies difficult. Communication is also a major challenge because of the absence of visual (body language) and verbal (intonation) clues. Research suggests that organizations can overcome these challenges through effective support and training.

Global Issues

Organizational structures often need to change as companies expand around the globe. An organization's leaders should plan carefully before opening offices in another country.

Many issues arise when an employer plans to open an international branch, hire international workers and formulate a globalized strategy. Among the questions that must be answered are:

• How do human resource legal requirements and practices vary from country to country?
• Should HR officials at headquarters do the work, or should a company open HR offices in the other country?
• Should an organization hire consultants to handle local hiring and personnel services?

Unless employers have a sound HR strategy ready before leaping into another country, they could fail.

When an organization opens international offices, HR professionals and other business leaders should be able to communicate as effectively with workers across the globe as around the corner. That can be a challenge. Having a robust intranet and using videoconferencing are alternatives to face-to-face communication.

As rapid changes in technology affect global communication, employees must be aware of linguistic, cultural, religious and social differences among colleagues and business contacts. The organization should train all employees (not just managers and CEOs who travel) in cultural literacy.

Moreover, employers should be aware that language difficulties, time‐and‐distance challenges, the absence of face‐to‐face contact, and, above all, the barriers posed by cultural differences and personal communication styles make global virtual work far more complex than local structures. These practices can enhance global virtual team relationships:

• Using online chats, video- and audioconferencing in addition to one-on-one conversations and e-mail.
• Posting profiles of team members that outline their expertise and roles in the organization.
• Being sensitive to the level of engagement team members are likely to deliver if they must meet at inconvenient hours across multiple time zones.

Legal Issues

Regardless of the type of structure, employers must ensure compliance with legal requirements in the countries where their organizations operate. Some of those requirements will be quite extensive (for example, public companies must ensure compliance with the Sarbanes-Oxley Act, and most organizations must ensure compliance with the Fair Labor Standards Act and its related state laws).

When organizational structures change, or if the chain of command is weak or fails to keep up-to-date with changes in the business, a company may have compliance problems because the structure has not been evaluated with regard to these laws. Imagine, for example, a restructuring that reduces the number of direct reports for an entire layer of management, which perhaps leads to those individuals no longer being exempt.

As an organization moves internationally, laws in the host countries must also be evaluated and a plan put in place for compliance before the expansion occurs. Employers must anticipate and plan for laws affecting all aspects of the employee experience, including hiring, benefits, leaves and termination.

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7 Organizational Structure Types (With Examples)

Updated: May 29, 2024, 5:39pm

Table of Contents

What is an organizational structure, 4 common types of organizational structures, 3 alternative organizational structures, how to choose the best organizational structure, frequently asked questions (faqs).

Every company needs an organizational structure—whether they realize it or not. The organizational structure is how the company delegates roles, responsibilities, job functions, accountability and decision-making authority. The organizational structure often shows the “chain of command” and how information moves within the company. Having an organizational structure that aligns with your company’s goals and objectives is crucial. This article describes the various types of organizational structures, the benefits of creating one for your business and specific elements that should be included.

Employees want to understand their job responsibilities, whom they report to, what decisions they can and should make and how they interact with other people and teams within the company. An organizational structure creates this framework. Organizational structures can be centralized or decentralized, hierarchical or circular, flat or vertical.

Centralized vs. Decentralized

Many companies use the traditional model of a centralized organizational structure. With centralized leadership, there is a transparent chain of command and each role has well-defined responsibilities.

Conversely, with a decentralized organizational structure, teams have more autonomy to make decisions and there may be cross-collaboration between groups. Decentralized leadership can help companies remain agile and adapt to changing needs.

Hierarchical vs. Circular

A hierarchical organization structure is the pyramid-shaped organization chart many people are used to seeing. There is one role at the top of the pyramid and the chain of command moves down, with each level decreasing in responsibilities and authority.

On the other hand, a circular organization chart looks like concentric circles with company leadership in the center circle. Instead of information flowing down to the next “level,” information flows out to the next ring of management.

Vertical vs. Flat

A vertical organizational chart has a clear chain of command with a small group of leaders at the top—or in the center, in the case of a circular structure—and each subsequent tier has less authority and responsibility. As discussed below, functional, product-based, market-based and geographical organizational structures are vertical structures.

With a flat organization structure, a person may report to more than one person and there may be cross-department responsibilities and decision-making authority. The matrix organizational structure described below is an example of a flat structure.

Benefits of Creating an Organizational Structure

There are many benefits to creating an organizational structure that aligns with the company’s operations, goals and objectives. Clearly disseminating this information to employees:

• Provides accountability
• Clarifies expectations
• Documents criteria for promotion
• Designates decision-making authority
• Creates efficiency
• Fosters collaboration

Essential Elements of Clear Organizational Structure

Regardless of the special type of organizational structure you choose, it should have the following components:

• Chain of command
• Roles and responsibilities
• Scope of control
• Decision-making authority
• Departments or teams within the organization

Functional/Role-Based Structure

A functional—or role-based—structure is one of the most common organizational structures. This structure has centralized leadership and the vertical, hierarchical structure has clearly defined roles, job functions, chains of command and decision-making authority. A functional structure facilitates specialization, scalability and accountability. It also establishes clear expectations and has a well-defined chain of command. However, this structure runs the risk of being too confining and it can impede employee growth. It also has the potential for a lack of cross-department communication and collaboration.

Product- or Market-Based Structure

Along with the functional structure, the product- or market-based structure is hierarchical, vertical and centralized. However, instead of being structured around typical roles and job functions, it is structured around the company’s products or markets. This kind of structure can benefit companies that have several product lines or markets, but it can be challenging to scale. It can also foster inefficiency if product or market teams have similar functions, and without good communication across teams, companies run the risk of incompatibility among various product/market teams.

Geographical Structure

The geographical structure is a good option for companies with a broad geographic footprint in an industry where it is essential to be close to their customers and suppliers. The geographical structure enables the company to create bespoke organizational structures that align with the location’s culture, language and professional systems. From a broad perspective, it appears very similar to the product-based structure above.

Process-Based Structure

Similar to the functional structure, the process-based structure is structured in a way that follows a product’s or service’s life cycle. For instance, the structure can be broken down into R&D, product creation, order fulfillment, billing and customer services. This structure can foster efficiency, teamwork and specialization, but it can also create barriers between the teams if communication isn’t prioritized.

Matrix Structure

With a matrix organizational structure, there are multiple reporting obligations. For instance, a marketing specialist may have reporting obligations within the marketing and product teams. A matrix structure offers flexibility, enables shared resources and fosters collaboration within the company. However, the organizational structure can be complex, so it can cause confusion about accountability and communication, especially among new employees.

Circular Structure

Similar to the functional and product-based structure, a circular structure is also centralized and hierarchical, but instead of responsibility and decision-making authority flowing down vertically, responsibility and decision-making authority flow out from the center. A circular structure can promote communication and collaboration but can also be confusing, especially for new employees, because there is no clear chain of command.

Organic Structure

Unlike vertical structures, this structure facilitates communication between and among all staff. It is the most complex, but it can also be the most productive. Although it can be challenging to know who has ultimate decision-making authority, it can also foster a positive company culture because employees don’t feel like they have “superiors.” This structure can also be more cost-efficient because it reduces the need for middle managers.

There is no one “right” organizational structure. When deciding which structure will work best for your company, consider the following:

• Current roles and teams within the company. How are job functions currently organized? Does it foster communication and productivity? Does it impede or encourage employee growth?
• Your strategic plan. What are your company’s goals for the short-term and long-term?
• Feedback from employees, leadership and other stakeholders. What do those within your company say about how the company is structured? What feedback do you have from other stakeholders, such as customers and suppliers?
• Alignment. What structure will best support your strategic plans and address any feedback received?

What is the most common organizational structure?

A functional organizational structure is one of the most common organizational structures. If you are still determining what kind of structure to use, this organizational structure can be an excellent place to start.

What is the difference between an organizational structure and an organizational chart?

An organizational chart is a graphic that depicts the organizational structure. The chart may include job titles or it can be personalized to include names and photos.

What are the four types of organizational structures?

A functional—or role-based—structure is one of the most common organizational structures. The second type—the product- or market-based structure—is also hierarchical, vertical and centralized. Similar to these is the third structure—the process-based structure—which is structured in a way that follows a product’s or service’s life cycle. Lastly, the geographical structure is suitable for businesses with a broad geographic footprint.

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Selecting the most suitable organizational structure for hospitals: an integrated fuzzy FUCOM-MARCOS method

Mohsen khosravi.

1 Department of Health Services Management, Shiraz University of Medical Sciences, Shiraz, Iran

Arash Haqbin

2 Department of Management, Shiraz University, Shiraz, Iran

Payam Shojaei

Associated data.

The datasets used and/or analyzed during the current study are included in the tables of the published article. More data are available from the corresponding author on reasonable request.

Previous studies mentioned four organizational structures for hospitals, which are budgetary, autonomous, corporate, and private. Nevertheless, healthcare decision-makers are still required to select the most organizational structure specific to their circumstances. The present study aims to provide a framework to prioritize and select the most suitable organizational structure using multicriteria decision-making (MCDM) methods in Iranian hospitals.

First, a multicriteria decision-making model consisted of the respective criteria, and alternatives were developed. The pertinent criteria were identified through a systematic literature review. The coefficient weights of the identified criteria were then calculated using FUCOM-F. Finally, organizational structures were prioritized in accordance with the identified criteria using FMARCOS.

The findings reveal that income is the most significant criterion in selecting organizational structures for hospitals whereas the number of outpatient visits is the least important. Also, the private structure is the most appropriate, and budgetary style is the least suitable organizational structure for Iranian hospitals.

Providing a framework in order to select the most appropriate organizational structure could help managers and policymakers of the healthcare sector in Iran and other countries, mainly similar developing countries.

Introduction

Throughout history, numerous organizational modalities have been introduced worldwide. These organizational modalities and the efforts made in order to refine them brought about various extensive changes, from a simple transition to a national revolution, which shows the importance of structure in organizations and institutions [ 1 ]. Nowadays, despite the approximate integration of these modalities after World War II (In particular, after the collapse of the Eastern Bloc), the debate over these structural changes is being continued. Such reforms are still being proposed to different countries, especially to developing countries with low income, under various titles such as structural adjustment reforms by international institutions like World Bank and International Monetary Fund. Naturally, the healthcare sector of the countries is also affected by these reforms, and, as a result, the organizational modality of health care providers changes [ 2 ].

In a study conducted by the World Bank [ 3 ], four types of hospitals in terms of the organizational modality were enumerated, which includes budgetary hospitals (with the lowest independence and minimal market connection), autonomous hospitals, corporate hospitals, and private hospitals (with the most independence from the government and the most connection with the market). According to the mentioned study, autonomization, corporatization, and privatization have the elements of marketization, which means reducing government direct control over hospitals and increasing their links to the market or market-like incentives. On the other hand, under the budgetary style, hospitals are often run as part of the government and have a designated and centralized budget, and all revenue goes back to a central ministry. Managers in budgetary hospitals have a degree of control. In contrast, autonomous public hospitals focus on marketing management, giving managers varying degrees of control over most daily decisions, increasing the organization's share of revenue, and exposing the organization to some degree of market or market-like pressures. Moreover, corporatization takes organizational reform one step further by mimicking the structure and efficiency of private companies, giving managers more control over decisions, service delivery, net income, and exposing the hospital to the market while emphasizing social goals through public ownership. Finally, privatization turns the public hospital into a for-profit or a non-profit private hospital. Full interaction with the market for revenue and high motivation of the owner to earn has increased the popularity of privatization compared to other structural styles [ 4 ].

Researchers and practitioners that prescribe structural adjustment policies for organizations and institutions believe that applying such structural adjustments in organizations will lead to organizational development, performance improvement, and ease of achieving organizational goals in the organization [ 5 ]. However, the debatable point in this regard is the type of structural adjustment policy applied in organizations by managers, each of which is selected according to different factors such as the environmental conditions, organizational settings according to Fiedler's contingency theory, short-term and long-term goals of the organization, and other specific circumstances [ 6 , 7 ].

The existing literature on the topic assert a conflicting and sometimes controversial results regarding the issue of restructuring healthcare organizations, specially hospitals. Regarding the autonomous structure of healthcare organziations, Govindaraj and Chawla [ 8 ] conducted a study in 1996 in five countries(Ghana, Kenya, Zimbawe, India and Indonesia)on the possible effects of restructuring healthcare facilities through autonomization; Few hospitals were monitored in each of the countries and the final conclusion was that autonomization hasn’t had any effect on efficiency, quality and accountibility. Harding and Preker  [ 3 ] assessed eight countries including Brittain, New Zealand, Australia, Hong Kong, Malaysia, Singapore, Indonesia and Tunisia; their findings disclosed that due to lack of data and effects of the correlative variables, no conclusive remark can be achieved from the study. Furthermore, McPake et al. [ 9 ] monitored some positive effects of autonomization on efficiency in five hospitals in Bogota, Columbia; Even though they asserted some positive effects, they mentioned that such improvements could be as the result of payment reforms that had been occurred during the time of autonomization. Kalhori [ 10 ] conducted a study on autonomized hospitals in Iran. The results showed that bed occupancy rate and the operation ratio was below the standards and in terms of financial figures, the hospitals were bankrupt. On the issue of corporatization and the corporate structure of hospitals, Gathorn [ 11 ] conducted a survey on nurses of corporatized hospitals in the US and asserted that corporatization had negative effects on nurses behavior and some of nurses had even started to do violent behaviors towards patients after the corporatization. Moreover, Collyer et al. [ 12 ] conducted a study in Australia and asserted that there is no proof showing that corporatized hospitals and corporate structure are more efficient than public hospitals and declared that any decrease witnessed in costs after corporatization is due to the elimination of highly skilled workers and employees. Kahancova et al. [ 13 ] conducted a study in Slovakia and Hungary and declared that working situation has become worse after corporatization due to the increasing target of decreasing costs initiated by managers after restructuring the organizations; they asserted that corporatization has been used as a mean towards a fully privatized hospitals. On the issue of the possible effects of privatization and restructuring of hospitals into fully private entities, Villa and Kane [ 14 ] conducted a study to assess the effects of privatization of hospitals in three states in the US; They found that with privatization, the hospitals decreased the amount of service delivery due to less profitability of some services and therefore privatization has decreased the access to the needed services for patients. Finally, Albreht [ 15 ] conducted a study on the privatization process in Europe and concluded that there is a risk of limited access and decreased equity after implementing privatization and it may create a parallel healthcare system in which only patients with higher payments can benefit from the services.

Since there are different factors that affect the process of selecting the type of organizational modality, this problem can be looked at from multicriteria decision-making (MCDM) point of view. MCDM problems have several alternatives and the decision-maker (DM) prioritizes the alternatives based on a set of relevant criteria [ 16 ]. Accordingly, the present study aims to select the best organizational modality for public hospitals in Iran using two novel MCDM techniques in a fuzzy environment, namely Full Consistency method (FUCOM) and Measurement Alternatives and Ranking according to the Compromise Solution (MARCOS). As a powerful and novel techniques, FUCOM and MARCOS methods are used and provided successful results in various contexts such as construction project management [ 17 ], road safety assessment [ 18 ], service quality assessment [ 19 ], alternative fuel evaluation [ 20 ], human resource management [ 21 ], sustainable traffic management [ 22 ], location selection [ 23 ], project management [ 24 ], measuring supply chain performance [ 25 ], and supplier selection [ 26 ]. Moreover, the fuzziness help overcome the ambiguity and uncertainty resulting from the judgments of the experts [ 27 ].

Despite lack of evidence on the usage of MCDM techniques to probe organizational structures and their effects in the healthcare sector, there is a growing trend in usage of MCDM techniques in other areas of healthcare which motivated the authors of current study to use MCDM techniques on the current topic and paving the way for future studies to get conducted by using such techniques by filling the existing void in the literature; Ahmadi et al. [ 28 ] conducted a research to identify factors that affect the hospital decision in adopting Hospital Information System (HIS) through using a hybrid MCDM technique. Similarly, Si et al. [ 29 ] used a hybrid MCDM technique to identify Key Performance Indicators for Holistic Hospital Management in hospitals. Torkzad and Beheshtinia [ 30 ] used four hybrid methods to evaluate and prioritize hospital service quality in a sample of 4 public hospitals in Iran. Moreover, Kadoic et al. [ 31 ] measured quality of public hospitals in Croatia Using a Multi-Criteria Approach with an aim to develop a methodology for ranking top-performing hospitals at the national level.

As mentioned above, he novelty of this paper can be traced back to the MCDM methodology applied in the research, giving in a new method and platform for researchers, healthcare managers and politicians in this scope of science to probe existing options on the table regarding the issue of increasing organizational efficiency and effectiveness through restructuring healthcare organizations in a more comprehensive and evidence-based framework.

The author’s motivation for conducting such study with such methodology was to investigate the most important organizational factors in the healthcare sector and suitable organizational structures to be applied in hospitals in Iran by consideration of its unique geopolitical, ecological and socioeconomic status by using local experts living in the country beside giving in a novel comprehensive evidence-based framework for upcoming researchers in the international stage in the scope of study.

The contribution of the present study is twofold: (a) it adopts a novel methodology based on FUCOM and MARCOS in a fuzzy environment, which, to the best of the authors’ knowledge, has not been employed in the healthcare management context and can be a pioneer of the future research on such topic through using a more defined and comprehensive numerical methodology such as the abovementioned methods; and (b) it tries to provide empirical findings that could help hospital managers and healthcare policymakers to select the most appropriate hospital organizational structure in Iran in a more detailed and comprehensive way in comparison to the previous studies. The results of this study can also be generalized to other countries, mainly similar developing countries.

The remainder of this study is structured as follows. " Methods " section introduces the proposed methodology in detail. Then, in " Results " the findings are provided and the results are discussed. Finally, " Conclusion " section draws the conclusion.

As previously mentioned, the primary purpose of this study is to choose the best organizational modality for Iranian hospitals. to achieve the mentioned purpose, the present study has consisted of three main stages, which are denoted in Fig.  1 .

Research process

As illustrated in Fig.  1 , first, a systematic literature review was conducted using major scientific databases such as Web of Science, Scopus, and PubMed in order to identify the affecting factors in selecting the organizational modalities for hospitals. The systematic review resulted in developing a multicriteria decision-making model consisting of decision criteria and alternatives. Then, the weights of the identified factors were calculated using Fuzzy Full Consistency (FUCOM-F) Method. Finally, the four organizational modalities mentioned earlier, namely, budgetary, autonomous, corporate, and private were prioritized in accordance with the identified criteria using Fuzzy Measurement Alternatives and Ranking according to the Compromise Solution Method (FMARCOS). Noteworthy to mention that the required data for calculating the weights and prioritizing the alternatives were gathered by pairwise comparison questionnaires from the members of an expert panel. Table ​ Table1 1 shows more information regarding the expert panel.

Expert panel details

In the following, fuzzy set theory and each adopted technique, FUCOM-F, and FMARCOS, are further elaborated:

Fuzzy set theory

First introduced by Zadeh in the 1960s, fuzzy set theory is an extension to classic set theory. fuzzy set theory is a membership function that plots elements to degrees of membership within a specific interval (Commonly [0, 1]). Fuzzy set theory can be extremely practical in uncertain decision-making environments and can eliminate the vagueness, ambiguity, and subjectiveness of the decision-makers (DMs), with the following main definitions [ 27 ]:

Definition 1

Assume that ω ∼ ∈ F ( R ) is a fuzzy number if two conditions are met. First, there is x 0 ∈ R such that μ ω ∼ x 0 = 1 . Second, for any α ∈ 0 , 1 , ω ∼ α = [ x , μ ω ∼ α ( x ) ≥ α ] is a closed interval. It should be noted that R is the set of real numbers and F(R) shows the fuzzy set.

Definition 2

A fuzzy number ω ∼ on R is a triangular fuzzy number (TFN) if its member function μ ω ∼ α x : R → [ 0 , 1 ] is:

where l, m, and u denote the lower, modal, and upper value of the ω ∼ in crisp form, respectively.

Definition 3

The graded mean integration representation (GMIR) of a TFN ω ∼ shows the ranking of that triangular fuzzy number and can be computed as:

Definition 4

If A ∼ = ( l A , m A , u A ) and B ∼ = l B , m B , u B are to TFNs, the basic mathematical operations between these two TFNs are as follows [ 32 ]:

Subtraction:

Multiplication:

Reciprocal:

Fuzzy Full Consistency Method (FUCOM-F)

Full Consistency Method (FUCOM) is developed by Pamučar et al. [ 33 ], which benefits from less pairwise comparisons than other weight calculation methods such as Best–Worst Method (BWM) and Analytical Hierarchy Process (AHP) [ 34 , 35 ]. The accuracy of methods for determining the weight coefficients is extremely dependent on the number of pairwise comparisons [ 36 ]. If n represents the number of criteria, then, the required pairwise comparisons for AHP and BWM are " n ( n - 1 ) 2 " and "2n−3", respectively. The number of pairwise comparisons for FUCOM, however, is only "n−1". Consequently, FUCOM must have more accurate and reliable results, which is also proved by other studies [ 37 ]. Pamučar and Ecer combined the Full Consistency Method with fuzzy set theory to develop FUCOM-F [ 36 ]. This recently developed technique is used in several contexts such as transportation management and healthcare management [ 18 , 20 , 38 , 39 ]. In the following, steps of FUCOM-F are explained:

Step 1. First, a set of decision criteria will be identified, which are represented by {C1, C2, …, Cn}. Then, the decision-maker (DM) arranges the identified criteria based on their significance in a way that the first criterion is expected to be the most important whereas the last criterion is expected to be the least important.

Step 2. Afterward, a pairwise comparison will be done. All the criteria are mutually compared to the most significant criteria using a fuzzy linguistic scale provided in Table ​ Table2 2 to obtain the fuzzy criterion significance ( ω ∼ C n ). Also, because the first-ranked criterion is compared with itself its membership function is (1, 1, 1). Using the fuzzy criterion significance ( ω ∼ C n ), fuzzy comparative significance ( φ k / ( k + 1 ) ) is computed as follows:

Fuzzy linguistic terms for decision-makers (Source: [ 36 ])

Note that φ k / ( k + 1 ) shows the importance that the criterion of C ( k ) rank has with respect to the criterion of C ( k + 1 ) rank. Finally, a fuzzy vector of the comparative significance of the evaluation criteria is determined as follows:

Step 3. Next, the fuzzy optimal weights are computed. The final weight values must satisfy two conditions mentioned below:

Condition 1: The ratio of weight coefficients of the criteria should be tantamount to their comparative significance:

Condition 2: the final weight values should satisfy transitivity regulation as follows:

According to the two conditions mentioned above, the final nonlinear model for calculating the optimal fuzzy values of the weight coefficients for all criteria is developed as follows:

min ε ∼

By solving the model mentioned in Eq. ( 13 ), the optimal weights w ∼ 1 ∗ , w ∼ 2 ∗ , ⋯ , w ∼ n ∗ will be computed. Also, the value of ε shows the deviation from full consistency.

Fuzzy Measurement Alternatives and Ranking according to the Compromise Solution Method (FMARCOS)

The measurement alternatives and ranking according to the compromise solution (MARCOS) method is initially proposed by Stević et al. as a novel prioritization technique based on the distance of alternatives from the ideal solution and the anti-ideal solution [ 40 ]. Compare to other multicriteria decision-making techniques, MARCOS has the advantages of suggesting a new way to calculate utility functions by considering an anti-ideal and an ideal solution simultaneously and providing a closer determination of the utility degree in relation to both solutions [ 40 ]. Furthermore, Stanković et al. combined the fuzzy set theory and MARCOS method to deal with the ambiguity and uncertainty of the judgments [ 32 ]. According to them, the steps of FMARCOS are as follows:

Step1. Similar to other prioritization techniques, an initial decision-making matrix consisting of n criteria and m alternatives will be developed in the first step. The initial decision-making matrix using the linguistic terms provided in Table ​ Table3 3 .

Linguistic terms for fuzzy MARCOS (Source: [ 32 ])

Step 2. Next, an extended initial fuzzy matrix will be constructed by determining the fuzzy anti-ideal A ∼ ( AI ) and fuzzy ideal A ∼ ( ID ) solution.

A ∼ AI is the anti-ideal or the worst alternative and A ∼ ID is the ideal or the alternative with the best performance. A ∼ AI and A ∼ ( ID ) are defined as follows:

For benefit criteria:

For cost criteria:

Step 3. Afterward, the extended initial fuzzy matrix will be normalized using the following equations:

Step 4. The normalized extended initial fuzzy matrix will be then multiplied with the fuzzy weight coefficients of the criterion w ∼ j to develop the weighted fuzzy matrix V ∼ = [ v ∼ ij ] m × n .

Step 5. Then, a fuzzy matrix of s ∼ i will be calculated using the following equation:

where s ∼ i ( s i l , s i m , s i u ) represent the sum of the elements of the weighted fuzzy matrix V ∼ .

Step 6. Using the following equations, the utility degree of alternatives k ∼ i will be determined

Step 7. In the next step, the fuzzy matrix T ∼ i is developed using the following equation:

Then, it is necessary to determine a new fuzzy number D ∼ , and defuzzify it according to Eq. ( 2 ) to determine the value of df crisp .

Step 8. The utility functions in relation to the ideal f ( K ∼ i + ) and anti-ideal f ( K ∼ i + ) solution is calculated as follows:

Step 9. Ultimately, the utility function of alternatives f k i is calculated as follows:

The alternatives are prioritized according to the value of utility function f k i , The highest value of the utility function shows the best alternative.

Developing an MCDM model

In order to identify the criteria for selecting the most appropriate organizational modalities, a systematic literature review was conducted. To this end, five major scientific databases namely, Web of Science, Scopus, PubMed, Embase, and Cochrane database as well as grey resources were searched to find the relevant articles using different keywords including structural adjustment, hospital, and healthcare. However, the search strings specific to each database are as follows:

Web of Science:

TOPIC: ((autonom* OR corporat* OR privat* OR "structural adjustment") AND ("efficiency" OR "satisfaction") AND ("hospital" OR "healthcare")).

TITLE-ABS-KEY ((autonom* OR corporat* OR privat* OR "structural adjustment") AND ("efficiency" OR "satisfaction") AND ("hospital" OR "healthcare")).

(autonom* OR corporat* OR privat* OR "structural adjustment") AND ("efficiency" OR "satisfaction") AND ("hospital" OR "healthcare").

autonom* OR corporat* OR privat* OR 'structural adjustment' AND ('efficiency'/exp OR 'efficiency' OR 'job satisfaction'/exp OR 'job satisfaction') AND ('hospital'/exp OR 'hospital' OR 'healthcare'/exp OR 'healthcare').

The search was limited to records published in the English language in the period between 1985 to 2022. Also, their quality was evaluated according to the NICE checklist [ 41 ]. The result of the systematic review was a total number of 16,193 records, which were screened based on their title, abstract, and the quality of their context. Finally, 41 articles were selected for identifying the pertinent criteria. Figure  2 shows the screening process of the systematic review. Also, the criteria identified through systematic review are available in Table ​ Table4 4 .

Systematic literature review process

Criteria for selecting the best organizational modalities in hospitals

The results of the systematic literature review and the four organizational modalities mentioned earlier helped to develop an MCDM model, which is illustrated in Fig.  3 .

Research MCDM model

Calculating the weights of criteria

To prioritize the organizational modalities, it is necessary to first calculate the weights of the identified criteria. As previously stated, in the present study FUCOM-F was employed to determine the weights. To this end, 6 DMs (mentioned in Table ​ Table1) 1 ) were asked to provide the initial rank of the criteria based on their judgment. Next, the DMs mutually compared the most significant criteria based on the fuzzy linguistic term provided in Table ​ Table2. 2 . Then, the fuzzy criterion significance was determined according to the mutual pairwise comparisons and Eq. ( 9 ). In the next step, 6 nonlinear models were developed for each DM using the two conditions mentioned in Eqs. ( 11 ) and ( 12 ). The models were solved using LINGO 18.0 software to obtain the optimal weights. Table ​ Table5 5 shows the weights and deviation from full consistency (ε) for each DM.

Fuzzy weights of criteria for each decision maker

The individual judgments are then aggregated to determine a single weight vector. The most common technique to aggregate individual judgments is the arithmetic mean [ 70 ]. Therefore, an arithmetic mean was used to obtain the final fuzzy weights. Even though the final fuzzy weights were used for ranking the alternatives in the next phase, final fuzzy weights were also transformed into crisp ones for better discussion on the criteria. Table ​ Table6 6 demonstrates the final fuzzy weights, final crisp weight, and ranking of the criteria, Fig.  4 depicts the final crisp weight as well.

Final weights and ranking of the criteria

Crisp weights of criteria

According to Fig.  4 , income (C6) is the most important criterion for selecting the most appropriate organizational modality in Iranian hospitals, with a weight coefficient of 0.1405. Moreover, patient satisfaction (C9), number of personnel (C7), access (C1), hospital admissions (C2), status of equipment (C8), bed occupancy rate (C5), the average length of stay (ALOS) (C3), and employee satisfaction (C10) are the most vital factors, respectively. Also, outpatient visits (C4) have the lowest significance with a weight coefficient of only 0.0514. This result of this study is consistent with various previous research that investigated the effect of organizational modalities and structural adjustment policies in the health sector, particularly in hospitals. Findings of Studies conducted by Collins et al. [ 51 ], Sharma and Hotchkiss [ 56 ], Shen [ 47 ], Kim and McCue [ 57 ], Huang et al. [ 67 ], Maharani et al. [ 53 ], Pan et al. [ 58 ], and Maharani and Tampubolon [ 64 ] indicate that revenue or income of the healthcare providers such as hospitals is the most influential factor for selecting structural adjustment policies. However, some studies such as Maruthappu et al. and Jones and Kantarjian mention that health must be considered as a public right and all the population has to access to health services equally; therefore, no attention must be paid to the financial aspects of healthcare services, especially in hospitals [ 71 , 72 ].

Prioritizing the organizational modalities

According to the MCDM model presented in Fig.  3 , there are four organizational modalities for hospitals, which are autonomous, corporate, private, and budgetary. To prioritize these policies using FMARCOS, a questionnaire was handed out to DMs. They were asked to express the preferences of each policy with respect to criteria based on the fuzzy linguistic terms in Table ​ Table3 3 to form the initial fuzzy matrix. Also, it should be noted that arithmetic mean was adopted to aggregate the initial fuzzy matrix for each expert into a single one since it is the most common aggregation method [ 70 ]. Then, the extended initial fuzzy matrix was developed using Eqs. ( 16 ) to ( 19 ). Noteworthy to mention that access (C1), hospital admissions (C2), outpatient visits (C3), income (C4), the status of equipment (C8), patient satisfaction (C9), and employee satisfaction (C10) are benefit criteria. In contrast, the average length of stay (C3), bed occupancy rate (C5), and the number of personnel (C7) belong to the cost criteria group. After normalizing the extended initial fuzzy matrix using Eqs. ( 20 ) and ( 21 ), the weighted fuzzy matrix was developed by multiplying the normalized extended initial fuzzy matrix with the fuzzy weights determined by FUCOM-F. In the following, the aggregated initial fuzzy matrix, the extended initial fuzzy matrix, normalized extended initial fuzzy matrix, and weighted fuzzy matrix are shown in Tables ​ Tables7, 7 , ​ ,8, 8 , ​ ,9, 9 , ​ ,10, 10 , respectively.

Aggregated initial fuzzy matrix

Extended initial fuzzy matrix

Normalized extended initial fuzzy matrix

Weighted Fuzzy Matrix

In the next step, the matrix s ∼ i , k ∼ i + , k ∼ i - and T ∼ i are calculated using Eqs. ( 23 ) to ( 26 ), respectively. Table ​ Table11 11 shows these matrices for each alternative

Matrix s ∼ i , k ∼ i + , k ∼ i - and T ∼ i

According to Eq. ( 27 ) a new fuzzy number D ∼ is developed and defuzzified using Eq. ( 2 ). The number D ∼ is as follows:

D ∼ = (1.1355, 2.4212, 5.0949), and df crisp = 2.6525

Finally, the utility functions in relation to the ideal f ( K ∼ i + ) and anti-ideal f ( K ∼ i - ) solution, and the utility function of alternatives f k i is calculated using Eqs. ( 28 ) to ( 30 ), respectively. Needless to say, the highest value of the utility function shows the best alternative. Table ​ Table12 12 shows the utility functions and the final ranking of alternatives. Also, Fig.  5 illustrates the utility functions of each alternative.

Utility function and ranking of alternatives

Utility function of alternatives

As depicted by Fig.  5 , the private modality (A3) is the most appropriate organizational modality for Iranian hospitals by stark contrast, with the utility function value of 0.8091. A controversial finding which has been under a fierce debate between academics, politicians and ordinary people due to its political nature and more importantly conflicting reports on its effects on efficiency, service quality, equity and access in healthcare sector [ 73 – 79 ]. Despite the existence of conflicting reports on the effects of private structure in hospitals on different aspects of healthcare delivery and financing, our experts shared a mutual view on the issue of private initiative in healthcare sector with international organizations experts and policy makers like world bank and IMF which implicitly shows the influence of such international organizations programs and policies on the healthcare academics in Iran [ 45 , 80 – 84 ].

Furthermore, there is a negligible difference amongst organizational modalities, autonomous (A1) and corporate (A2) are considered the best based on the judgment of experts, with the utility function value of 0.5848 and 0.5407, respectively. Moreover, budgetary (A4) is the least appropriate organizational modality, with the utility function value of 0.5228. Such ranking can be decisive for healthcare managers and policy makers during the transitional period of healthcare industry into a market-based entity through restructuring the organizational aspects of the service providers, since according to some studies, restructuring healthcare organizations and the transition of service delivery to market-type mechanisms needs a long-term planning with a precious analysis of organizational environment and warn healthcare managers and politicians of severe costs and backlash if such transition happens without a situational analysis and in a go; A fact that shows such restructuring programs cannot be applied to all organizations with different circumstances with a single framework and more importantly needs to be done in a form of step by step process of restructuring towards a fully private structure providing healthcare services [ 42 , 85 , 86 ].

As mentioned earlier, similar to our findings, implications of numerous previous studies conducted by international organizations such as the World Bank and the International Monetary Fund and other researchers show the suitability of the private modality for hospitals [ 47 , 49 , 50 , 55 , 65 , 87 ] and inadequacy of budgetary and fully governmental organizational modality [ 58 , 88 , 89 ]. However, it`s worthy of mentioning that some studies have also reached different and contradictory conclusions. For instance, Dahlgren, Doshmangir et al., and Pan et al. mentioned that not only hospital performance indicators will not improve by changing the organizational modality of hospitals into a private one, but even in some cases, it causes diminished hospital performance. Nonetheless, the findings of this study are in accordance with the more highlighted point of view, meaning appropriateness of the private modality for hospitals [ 58 , 88 , 89 ]; A phenomenon which clearly demonstrates the conflicting and undecisive results derived from studies on the context; something which led us to use the views of local experts rather than international academics earlier in the study.

Managerial implications

The results obtained based on the judgments of the experts of this study provide several practical suggestions for the hospital managers and policymakers in Iran and other similar developing countries, who want to apply structural adjustment policies in order to change the organizational modality of their hospitals. As the results of the literature review show, the most crucial recommendation is that if there is a need and also a strong will to make a change, managers and policymakers should better consider a full transition to a private organizational modality rather than shift only to a corporate or an autonomous one. It needs to be mentioned that as several studies have shown, in most cases, specially in developing countries, there is a need to bring upon the structural adjustment initiative in a step by step long-term run due to several factors like socio-economic and geopolitical aspects of each case; otherwise the initiative may result in the opposite of what is aimed for [ 84 , 90 ]. Furthermore, since there is a possibility that privatization causes an increase in health services costs, hospital managers and policymakers should pay attention to the problems and issues of the public population with lower income ensuring justice in the distribution of health services as a public right.

The objective of this study was to prioritize the four organizational modalities, namely autonomous, corporate, private, and budgetary for Iranian hospitals. To do so, in the first step, a systematic literature review was conducted to find the respective prioritization criteria and develop a multicriteria decision-making model. Then, the policies were prioritized using MCDM techniques in a fuzzy environment. Integrating Fuzzy sets to MCDM techniques can be very helpful in uncertain decision-making environments by reducing the vagueness, ambiguity, and subjectiveness of the decision-makers (DMs). The adopted techniques were FUCOM-F for determining the coefficient weights and FMARCOS for prioritization of alternatives, which both of them have several advantages compared to other similar techniques. FUCOM has fewer pairwise comparisons and MARCOS considers both anti-ideal and an ideal solution simultaneously providing more reliable results. According to the findings, income is the most vital criterion in selecting organizational modalities for hospitals and the private modality is the most appropriate organizational modality for Iranian hospitals; a fact that clearly demonstrates the growing need of the healthcare sector in Iran to exponentially integrate and comply with market and market type mechanisms either through a direct privatization initiative or a step by step scenario through autonomization or corporatization with an eye to convert hospitals to totally private entities in the long run which is supported by other results of this study which prioritize autonomous and corporate hospitals over budgetary ones [ 84 , 90 ]. An agenda which is closely aligned with IMF and world bank policies in developing countries like Iran which clearly shows the high capacity in the Iranian healthcare sector to potentially get involved in such international organizations programs and initiatives in the near future. Moreover, this study contributes to the literature by proposing a novel methodology based on FUCOM and MARCOS in a fuzzy environment for the first time in the healthcare management context and helps hospital managers and healthcare policymakers in developing countries regarding organizational modalities and structural adjustment policies. Finally, it should be mentioned that there are some limitations regarding the results of the study due to the possible existence of conflict of interest in the experts which possibly can be in contrast with views of a high amount users in the healthcare system at times due to their arguably higher socioeconomic status than most of the patients using services of hospitals in Iran; a hypothesis which is needed to get addressed in the future research regarding this scope of study. This paper highlights the need for acquiring new approaches in studying and benchmarking organizational modalities in the research area of structural adjustment policies by using a Fuzzy FUCOM-MARCOS Approach as a brand-new initiative to be applied and modeled by upcoming studies related to the literature.

Author contributions

MK: Conceptualization, data interpretation. Writing the original manuscript; AH: Methodology, data curation, writing the original manuscript; ZZ: Data collection, data interpretation, editing and revising: PS: Supervision, methodology, editing and revising. All authors read and approved the final manuscript.

The present study did not receive any specific grant from funding agencies in the public, commercial, or non-profit sectors.

Availability of data

Declarations.

All the methods adopted in the present study were in accordance with relevant guidelines and regulations. Also, Informed consent was obtained from all the participant.

Not applicable.

The authors declare that they have no competing interests.

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Critical Influence ™ : Organizational Structure

What is organizational structure.

While you can easily identify one when you see it, how would you create a perfect org chart? Let’s start first with the definition of organizational structure.

An organization’s structure is the hierarchical arrangement of individuals within a business entity. It defines the roles and responsibilities of each individual, who supervises whom, and how decision-making or information flows within the structure. This flow describes how each member works in achieving collective goals.

No two organizations are exactly identical. This is because structure is established depending on the purpose of existence, objectives, and the needs of an organization.

In the business world, organizational structures have changed over time in response to shifting social influences and organizational theory. Let’s explore the different theories that gave way to the various types of organizational structures that have been introduced to the business scene through the years.  

As part of the 15 Critical Influences™, this page on Organizational Structure is integrated with actual content from the book Innovations in Office Design: The Critical Influence Approach to Effective Work Environments™ by SCG Founder Diane Stegmeier.

The history of organizational structure

Many organizational theories serve as guidance and direction for businesses, especially for start-ups and companies that are seeking to improve their processes. Here are some of the theories that influenced the organizational structures in the business world:

• 1911 – Frederick Taylor, the “father of scientific management,” offered sound advice for businesses operating in the Industrial Age. Focused on the principles of task specialization and production efficiency, he recommended a “unity of command,” whereby each employee reported to only one individual within the overall chain of authority. 
• 1920s to early 1930s – The findings of Harvard University’s Elton Mayo from the Hawthorne studies conducted at Western Electric in Chicago, launched new thinking about the physical work environment, human motivation, and worker productivity. These research results are said to have launched the human relations movement in organizational theory. 
• 1940s – Reinforced by the introduction of Abraham Maslow’s hierarchy of needs, the importance of applying principles of sociology and psychology in the workplace increased among business leaders. 
• 1950s to 1960s – The thought leadership of Peter Drucker, Rensis Likert, Laurence Peter, Kurt Lewin, Douglas McGregor, Warren Bennis, and others became required reading for those charged with advancing their organizations to future success. Vanderbilt University’s Richard L. Daft suggested that “organizational form and design are the ultimate expression of strategy and implementation.”
• 1979 – The classic structural framework proposed by Henry Mintzberg, the Cleghorn Professor of Management Studies at McGill University in Montreal and a professor of organization at INSEAD in Fontainebleau, France, began serving companies that were aggressively pursuing innovation as a strategic intent. The specific organizational design envisioned by Mintzberg, an adhocracy, is a matrix structure developed for survival in a complex, dynamic environment. High-performance teamwork is enabled through numerous horizontal linkages and empowerment. In an adhocracy, professionalism is emphasized, cultural values are strong, and decision making is encouraged at all levels of the organization. 
• Information Age – As the Industrial Age gave way to the Information Age, the heightened complexity of work necessitated a more holistic approach to organizational analysis. The typical business structure needed to incorporate growing uncertainty and the interdependency of subsets of the whole system. The principles of systems thinking, contingency planning, adaptation, and change readiness became the guidelines for business leaders in developing organizational structures. 
• Late 1990s – The more recent work of Henry Mintzberg in conjunction with Ludo Van der Heyden, the Solvay Chair for Technical Innovation at INSEAD, echoes the need for organizational preparedness in order to tap competitive opportunities and to understand how innovative ideas flow throughout the structure via a system of hubs and webs. The visual depiction of the structure, in the form of an organigraph, helps business leaders prepare structurally for innovative outputs. 

It can be observed that as new theories surfaced and were introduced to the corporate world, executives were learning that innovation favors a combination of prepared minds and strategically crafted organizational structures. 

These same leaders, however, often fail to recognize the impact of the physical work environment on the innovative outputs critically needed for survival in the competitive global economy. In the words of American physicist Joseph Henry, “The seeds of great discoveries are constantly floating around us, but they only take root in minds well prepared to receive them.”

When attempting to drive innovation by introducing change in the workplace, it is beneficial to keep the above points in mind. But how can organizational structure and the physical workplace be strategically aligned to ensure the success of a workplace strategy that aims to foster innovation? Read on.

The impact of organizational structure on workplace strategy

The alignment of organizational structure and the physical work environment holds so much potential in steering innovative behavior in the workplace. And yet, many leaders continue to overlook this vital aspect when managing change initiatives.

As an example, many companies still perceive physical work space as a currency to reward status. If someone holds a high position in the organization, that individual is entitled to a private office to show that they are valued. 

When this mentality is still present in the implementation of workplace changes, consequences may arise. A new workplace strategy that maintains outdated standards of using space to reward status may invest in many under-utilized private offices. If the new way of working is centered on collaboration and encouraging innovation, these private spaces should not be used as much.

However, when executives and leaders have a deeper understanding of how the physical workplace can be optimized to support organizational structures, better results will come out of the process. The new workplace strategy is appropriately aligned with the ever-changing organizational hierarchy by incorporating flexibility to reconfigure departmental space through fewer hard walls.

But you may ask, “Why does the physical workplace need flexibility? Do organizational structures really change?”

Architects and interior designers also face related questions as they create workplace environments for their clients today: Against which model of organizational structure will a solution be judged for its effectiveness? What will change? What will remain the same? 

If there’s one thing we can count on, it’s that the only constant is change. The need for an enterprise, its structure, workforce, and physical and virtual workplace environments to be flexible and adaptable, to respond to whatever changes are on the business horizon, cannot be overstated. 

But you might well ask: Does an organizational structure exist that is agile enough for today’s unpredictable business landscape as well as for the unpredictable future? To shed some light on this question, let’s explore concepts from the thought leadership of Robert Johansen and Rob Swigart.

Building flexibility into your organizational structure and workplace

If you ask any number of individuals in the business world to visualize a corporate hierarchy, the typical description will be of a pyramid. A pyramid maintains the precise, hard-edged structural shape, incapable of flexing. It does not morph according to changes in the external environment. 

Robert Johansen and Rob Swigart challenged our thinking about organizational flexibility and adaptability in their book Upsizing the Individual in the Downsized Organization: Managing in the Wake of Reengineering, Globalization, and Overwhelming Technological Change. In it, they introduced the concept of the “Fishnet Organization.”

Imagine a net laid out on a dock. If you grab a node and lift, the rest of the net lattices nicely under it. A temporary hierarchy appears as long as you hold up the node, with layers consistent with how high you lift the node and the width of the mesh. The hierarchy disappears when you lay the net down. Pick up another node, another soft hierarchy appears.”

—ROBERT JOHANSEN AND ROB SWIGART, 1994

The creation of numerous teams is driven by changing demands being made from within and outside of the enterprise. An individual is often a member of multiple groups. Collaborative, task-driven units form, achieve what they are charged to do, then disband. With each new temporary hierarchy that forms around a project or initiative comes new connections within that node, as well as relationships between the ever-changing collection of nodes. 

In the Fishnet Organization, the structure of each temporary team is as large as it needs to be to incorporate the diverse talents required to accomplish the given initiative. That’s not to say that permanent hierarchies do not exist in this structure. On the contrary, the formal authority in the organization acts to support the various temporary hierarchies that form and dissolve over time. 

Another idea from Robert Johansen also offers guidance for business leaders of today. His book titled Get There Early: Sensing the Future to Compete in the Present, includes his thought leadership on the role of the office and other physical places where “real work” gets done. He said, “Gradually, organizations are coming to think of the office as a flexible array of activities—not necessarily a fixed place.” Johansen advises us to “learn to be comfortable being uncomfortable. Offices as we know them are part of our current comforts, but the ground is shifting beneath the office.”

In the context of the physical work environment, these concepts can be integrated into the planning and implementation of a new workplace strategy. While there is much to think about and consider when attempting to drive change in the workplace, ideas from these thought leaders can light the path and help leaders see the influence of organizational structure in workplace transformations.

This is especially true when an enterprise ventures into the idea of workplace flexibility. To give employees control over when, where, and how they work, a culture of trust needs to prevail in all roles within the organizational structure. For example, when implementing work from home procedures , those in managerial roles need to trust people to be productive no matter where they are. 

In a new office environment, trust is shown when employees are given the autonomy and authority to choose from different workplace settings that will best support productivity in relation to the task at hand. For this to happen, managers and leaders must shift from a line-of-sight mentality to a supervision that holds employees accountable for results.

The most important takeaway from this is that attitudes displayed by all members of the organizational structure need to be aligned with the objectives of a new workplace strategy in order to see a successful change take place.

Consulting expertise to help you align your organizational structure with your new workplace strategy

Organizational structures have a significant impact on the physical work environment. As a change leader, it is important for you to look into your existing or even future organizational structures that might need to be established and oversee its alignment with your new workplace strategy.

Whether you are planning to initiate a workplace change or in the midst of implementing it, Stegmeier Consulting Group’s expertise can lead you through the process and provide you with knowledge on how your organizational structure can thrive in a new work environment. Start discussing your plans with us by filling out the form below.

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• Principal Analyst  – Matt Quijas
• Principal Analyst – Anna Ingram
• Developer  – Stephen Klamet
• Functional Administrator  – Lorna Vazquez

Assistant Vice Chancellor for Impact & Belonging and Director, External Affairs – Mindie Paget

• Communications Coordinator  – Vince Munoz

Director, Faculty Recognition & Awards – Robin Lehman 

Director, research development – carol burdsal.

• Associate Director, Research Development  – Doug Bornemann
• Administrative Associate Sr. – Gabriel Nehrbass 

Director, Research Integrity – Susan MacNally

• Associate Director, Research Integrity – Vacant
• Administrative Associate  – Tessa Maclean
• Human Research Protection Program Coordinator – Jennifer Dumpert
• Compliance Coordinator – Alexander Smith
• Research Compliance Officer  – Rhett Caviel

Associate Vice Chancellor, Economic Development – Tricia Bergman

Executive director, ku center for technology commercialization – cliff michaels.

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Hall Center for the Humanities

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• Paulette Spencer – Director

Kansas Biological Survey & Center for Ecological Research (KBS-CER)

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Kansas Geological Survey (KGS)

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Core Research Resource Labs

Research Laboratories

• Center for Research Computing – Hoang Tran, Director
• Instrumentation Design Lab – Rob Young, Director
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Biomedical Research Centers

• Animal Care Unit – Craig Kreikemeier-Bower, Director
• Biopharmaceutical Innovation & Optimization – Michael Hageman, Director
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Molecular Structures Group

• Biomolecular NMR Laboratory – Justin Douglas, Director
• Mass Spectrometry & Analytical Proteomics Laboratory – Anita Saraf, Director
• Molecular Graphics & Modeling Laboratory – David Johnson, Director
• Nuclear Magnetic Resonance Laboratory – Justin Douglas, Director
• Protein Structure & X-ray Crystallography Laboratory – Scott Lovell, Director

Collaborating Laboratories

• Computational Chemical Biology Core Laboratory – David Johnson, Director
• Genome Sequencing Core Laboratory – Jennifer Hackett, Director
• Infectious Disease Assay Development Core Laboratory – Anu Roy, Director
• Synthetic Chemical Biology Core Laboratory – Chamani Perera, Director

Structures from the PDB  Computed Structure Models (CSM) Structure Summary Annotations FASTA Sequence mmCIF Format mmCIF Format (Header) PDB Format (Header) PDBx/mmCIF Format PDBx/mmCIF Format (gz) BinaryCIF Format (gz) PDB Format (gz) PDBML/XML Format (gz) Structure Factors (CIF) Structure Factors (CIF - gz) Validation Full PDF Validation (XML - gz) Validation (CIF - gz) Biological Assembly 1 (CIF - gz)  Biological Assembly 1 (PDB - gz) Map Coefficients (MTZ format) Crystal structure of the ABA receptor PYL1 in complex with DBSA compound PDB DOI:  https://doi.org/10.2210/pdb9J6I/pdb Classification:  LIPID BINDING PROTEIN Organism(s):  Arabidopsis thaliana Expression System:  Escherichia coli BL21(DE3) Mutation(s):  No  Deposited:  2024-08-16  Released:  2024-09-04  Deposition Author(s):  Yan, J. Funding Organization(s):  National Natural Science Foundation of China (NSFC) Experimental Data Snapshot Method:  X-RAY DIFFRACTION Resolution:  2.30 Å R-Value Free:  0.252  R-Value Work:  0.207  R-Value Observed:  0.209  Starting Model: experimental View more details wwPDB Validation     3D Report   Full Report Chemical control of plant water loss by stabilizing dimeric ABA receptor   Explore in 3D :  Structure | Sequence Annotations | Electron Density | Validation Report | Ligand Interaction  (H9X) Biological assembly 1 assigned by authors and generated by PISA (software) Macromolecule Content Total Structure Weight: 41.04 kDa  Atom Count: 2,784  Modelled Residue Count: 338  Deposited Residue Count: 350  Unique protein chains: 1 Molecule Chains  Sequence Length Organism Details Image Abscisic acid receptor PYL1 , 175 : 0  ,  ,  ,      Sequence Clusters UniProt Group Ligands 1 Unique ID Chains  Name / Formula / InChI Key 2D Diagram 3D Interactions (Subject of Investigation/LOI) C [auth B] C H Br N O S NHTMTRVPPRZTCB-UHFFFAOYSA-N Interactions   Interactions & Density   Experimental Data Space Group:  P 6 5 Length ( Å ) Angle ( ˚ ) a = 126.99 α = 90 b = 126.99 β = 90 c = 60.195 γ = 120 Software Name Purpose PHENIX refinement HKL-2000 data reduction HKL-2000 data scaling PHASER phasing Structure Validation View  Full Validation Report Deposition Data Released Date:  2024-09-04  Funding Organization Location Grant Number National Natural Science Foundation of China (NSFC) China -- Revision History   (Full details and data files) Version 1.0: 2024-09-04 Type: Initial release Publications Usage & Privacy Documentation Website FAQ Service Status RCSB PDB ( citation ) is hosted by RCSB PDB is a member of the RCSB Partners Nucleic Acid Knowledgebase wwPDB Partners RCSB PDB Core Operations are funded by the U.S. National Science Foundation (DBI-2321666), the US Department of Energy (DE-SC0019749), and the National Cancer Institute , National Institute of Allergy and Infectious Diseases , and National Institute of General Medical Sciences of the National Institutes of Health under grant R01GM133198. Student Opportunities About Hoover Located on the campus of Stanford University and in Washington, DC, the Hoover Institution is the nation’s preeminent research center dedicated to generating policy ideas that promote economic prosperity, national security, and democratic governance.  The Hoover Story Hoover Timeline & History Mission Statement Vision of the Institution Today Key Focus Areas About our Fellows Research Programs Annual Reports Hoover in DC Fellowship Opportunities Visit Hoover David and Joan Traitel Building & Rental Information Newsletter Subscriptions Connect With Us Hoover scholars form the Institution’s core and create breakthrough ideas aligned with our mission and ideals. What sets Hoover apart from all other policy organizations is its status as a center of scholarly excellence, its locus as a forum of scholarly discussion of public policy, and its ability to bring the conclusions of this scholarship to a public audience. Russell A. 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Contact us Support the Mission of the Hoover Institution Subscribe to the Hoover Daily Report Follow Hoover on Social Media Make a Gift Your gift helps advance ideas that promote a free society. About Hoover Institution Meet Our Fellows Focus Areas Research Teams Library & Archives Library & archives Events, news & press. Seizure Of Russian Assets I've been a bit skeptical about seizure of Russian assets, mostly on pragmatic grounds: Seizing a sovereign's money when one is not yet actually at war with the sovereign strikes me as a perilous matter, not quite as much as seizing the sovereign's territory but still a big deal. View the discussion thread. Join the Hoover Institution’s community of supporters in ideas advancing freedom. This week: the arXiv Accessibility Forum Help | Advanced Search Computer Science > Artificial Intelligence Title: chartmoe: mixture of expert connector for advanced chart understanding. Abstract: Automatic chart understanding is crucial for content comprehension and document parsing. Multimodal large language models (MLLMs) have demonstrated remarkable capabilities in chart understanding through domain-specific alignment and fine-tuning. However, the application of alignment training within the chart domain is still underexplored. To address this, we propose ChartMoE, which employs the mixture of expert (MoE) architecture to replace the traditional linear projector to bridge the modality gap. Specifically, we train multiple linear connectors through distinct alignment tasks, which are utilized as the foundational initialization parameters for different experts. Additionally, we introduce ChartMoE-Align, a dataset with over 900K chart-table-JSON-code quadruples to conduct three alignment tasks (chart-table/JSON/code). Combined with the vanilla connector, we initialize different experts in four distinct ways and adopt high-quality knowledge learning to further refine the MoE connector and LLM parameters. Extensive experiments demonstrate the effectiveness of the MoE connector and our initialization strategy, e.g., ChartMoE improves the accuracy of the previous state-of-the-art from 80.48% to 84.64% on the ChartQA benchmark. Subjects: Artificial Intelligence (cs.AI); Computation and Language (cs.CL); Computer Vision and Pattern Recognition (cs.CV) Cite as: [cs.AI]   (or [cs.AI] for this version)   Focus to learn more arXiv-issued DOI via DataCite (pending registration) Submission history Access paper:. HTML (experimental) Other Formats References & Citations Google Scholar Semantic Scholar BibTeX formatted citation Bibliographic and Citation Tools Code, data and media associated with this article, recommenders and search tools. Institution arXivLabs: experimental projects with community collaborators arXivLabs is a framework that allows collaborators to develop and share new arXiv features directly on our website. Both individuals and organizations that work with arXivLabs have embraced and accepted our values of openness, community, excellence, and user data privacy. arXiv is committed to these values and only works with partners that adhere to them. Have an idea for a project that will add value for arXiv's community? Learn more about arXivLabs . 260 IMAGES A Comprehensive Guide to Organizational Structure + 7 Types Organizational Chart Organizational Theory: Definition, Meaning & Examples 7 Organizational Structure Types (With Examples) Organizational Chart 17 Types of Organizational Design and Structures VIDEO March 27, 2024 Research Series Dalya Manatova Types of Organizational Structure Orientation Session 3 Understanding the Organizational Structure Eller Research WHAT IS AN ORGANIZATIONAL STRUCTURE IN A BUSINESS PLAN Unleashing Innovation: A New Approach to Organizational Structure COMMENTS (PDF) Organizational Structure (PDF) Organizational Structure Organizational Structure: Articles, Research, & Case Studies on New research on organizational structure from Harvard Business School faculty on issues including organizing to spark creativity, effectiveness of various organizational hierarchies, and how IT shapes top-down and bottom-up decision making. Page 1 of 16 Results What do you mean by organizational structure? Acknowledging and What do you mean by organizational structure ... Categorizing the Complexity: A Scoping Review of Structures Within Structure is a classic concept of interest in the management domain. Historically, organizational-structure research focused on themes related to task allocation (the division of labor into distinct tasks), coordination (integration of labor to enable accomplishing joint goals), and formal decision-making authority (power within specific levels and spans of control; see Lawrence & Lorsch, 1967 ... Organizational Structure from Interaction: Evidence from Corporate Sara B. Soderstrom is an assistant professor in organizational studies and program in the environment at University of Michigan, 825 Weiser Hall, 500 Church Street, Ann Arbor, MI 48109 (e-mail: [email protected]).Sara studies responses to sustainability challenges, including how individuals and organizations make sense of ambiguity and uncertainty, mobilize participants and build coalitions ... PDF Organizational Structure, Information Processing, and Decision-making Research on organizational structure, information processing, and decision-making has spanned over seven decades. The areas of the organization theory, strategy, and organizational economics (among others) have concerned themselves with this subject and have used different theories and methods to examine a va- Organizational Structure, Information Processing, and Decision-Making Beginning with Simon (1947)—and motivated by an interest in the effect of formal organizational structure on decision-making—a large body of research has examined how organizations process information. Yet, research in this area is extremely diverse and fragmented. We offer a retrospective of past research to summarize our collective knowledge, as well as identify and advance new concerns ... Organizational Structure By: Ethan Bernstein. This module note for instructors describes the organizational structure module of the Managing Human Capital course that integrates insights from research on workplace connectivity (who gets to communicate with whom) and workplace transparency (who gets to observe... View Details. Organizational Research Methods: Sage Journals Organizational Research Methods (ORM), peer-reviewed and published quarterly, brings relevant methodological developments to a wide range of researchers in organizational and management studies and promotes a more effective understanding of current and new methodologies and their application in organizational settings.ORM is an elite scholarly journal, known for high-quality, from the ... Organizational Structure Conceptualization of organizational structure is the manifestation of systematic thought. The organization is composed of elements, relations between elements and structure as a generality composing a unit. ... It refers to the information, equipment, techniques and process to turn the inputs to outputs. Woodward Research: He mostly focused on ... PDF Key Considerations in Organizing and Structuring University Research research leadership; research organizational structure Introduction Once concentrated in the more developed countries, university research capacity building has now become an increasingly important task in both developed and less developed countries (Nguyen, 2013a). In particular, for countries and institutions that are starting to build or trying Section 1. Organizational Structure: An Overview Section 1. Organizational Structure: An Overview Organizational Structure: Influencing Factors and Impact on a Firm impact on the overall organizational efficiency. Many of these factors are from the environment where traditional view. commonly divided into internal and external factors. This paper presents the ... The Importance of Organizational Design and Structure The Importance of Organizational Design and Structure Organizational Structure December 16, 2022. Organizational structure can be defined as a system for outlining management roles and responsibilities to achieve organizational goals. Organizational structure also determines the pattern of information flow within the organization. For instance, in highly hierarchical structures decisions are communicated from top to down ... Top Organizational Structures for 2024: How to Choose the Best Understanding Organizational Structures 7 Organizational Structure Types (With Examples) 7 Organizational Structure Types (With Examples) Selecting the most suitable organizational structure for hospitals: an Selecting the most suitable organizational structure for ... (Pdf) How Organizational Matrix Structure Can Impact in Project factor affecting the choice of problems within the matrix organization. Matrix structure has impact on project management effectiveness. Matrix structure as an influencing variable in project ... Organizational Structure and Its Impact on Workplace Strategy The impact of organizational structure on workplace strategy. The alignment of organizational structure and the physical work environment holds so much potential in steering innovative behavior in the workplace. And yet, many leaders continue to overlook this vital aspect when managing change initiatives. As an example, many companies still ... Organizational Chart Organizational Chart. Subscribe to be notified of changes or updates to this page. The Research Institute's Organizational Chart is a valuable visual tool to understand how we leverage expertise across the research community to achieve these goals. Find members of these teams on the Research Institute's Organizational Chart (log in required). Organizational charts Organizational charts. The Office of Research consists of staff who facilitate all facets of research and related support, technology commercialization, and business and industry outreach. KU Research also oversees the university's 11 designated research centers and the bulk of its core laboratories. RCSB PDB Crystal structure of the ABA receptor PYL1 in complex with DBSA compound (PDF) University Research Centres: Organizational Structures and This research is focused on organizational structure and its influence on better research performance in URCs. In this case, URCs located in Aragon, Spain have been studied. Seizure Of Russian Assets Fellows. Hoover scholars form the Institution's core and create breakthrough ideas aligned with our mission and ideals. What sets Hoover apart from all other policy organizations is its status as a center of scholarly excellence, its locus as a forum of scholarly discussion of public policy, and its ability to bring the conclusions of this scholarship to a public audience. [2409.03277] ChartMoE: Mixture of Expert Connector for Advanced Chart Automatic chart understanding is crucial for content comprehension and document parsing. Multimodal large language models (MLLMs) have demonstrated remarkable capabilities in chart understanding through domain-specific alignment and fine-tuning. However, the application of alignment training within the chart domain is still underexplored. To address this, we propose ChartMoE, which employs the ... essay homework paper phd project resume review speech study thesis