1.Different ways of organizing a company.
The need for a solid structure within all business entities is absolutely fundamental. Organisational structure concerns who reports to whom in the company and how different elements are grouped together. A new company can not go forward without this and established companies must ensure their structure reflects their target markets, goals and available technology.
Depending on their size and needs there are several organizational structures companies can choose from. But in the constantly evolving business environment many firms are opting for a kind of hybrid of all of them.
The most recognisable set up is called the functional structure where a fair traditional chain of command, incorporating senior management, middle management and junior management, is put in place. The main benefit of this system is clear lines of commynication from top to bottom but it is generally accepted that it can also be a bureaucratic set up which does not favour speedy decision-making.
More and more companies are organizing themselves along product lines where companies have separate divisions according to the product that is being worked on. In this way the focus is on the product and how it can be improved.
The matrix structure. Essentially the matrix structure organizes a business into progect teams, led by project leaders, to carry out certain objectives. Training is vitally important here in order to avoid conflict between the various members of the team.
In the 1980s a wave of restructuring went through industry around the globe. This process, knowing as delayering, say a change in the traditional hierarchical structures with layers of middle management being removed. This development was driven by new technology and by the need to reduce costs. The overall result was organizations that were less bureaucratic.
Restructuring has evolved along with a more customercentric approach that can be seen to good effect in the banks. They now categorise customers their customers and their complex borrowing needs into groups.
Another development can be seen in large companies which are giving their employees more freedom to innovate in order to maintain a competitive edge. For example, a leading software company – Microsoft, has a very flat organizational structure. There would not be more than around seven levels between the average software tester and Bill Gates. Microsoft is a good example of a company that is structured along product lines.
Without a huge bureaucratic infrastructure people can react a lot more quickly to any challenges and work towards the company`s objectives.