Organisational design and structure

There are many people argue that which structure is the best for the organization for their company. In fact, there is no answer for this question. There are so many organizational structures such as tall structures, flat structures and matrix structures. In reality, the situation is more complicate that these structure may not meet the requirement of the company, because each structure has their own features, advantages and disadvantages.

First thing first, this picture represents the relationship between the structure styles and the company details. For a large company, its structure must more complex than a small company. Then, how come the large company can be well organized with a complex structure? Different level of manager takes the responsibility of the company, and leads the company on a correct direction. Every structure also has managers to manage and organize the resources.

For a tall structure company, it represents hierarchy, long chain of command and constricted spans of control. The level between managers is very clear, such as the top manager (CEO), middle manager and first line manager. Generally, when the company grows, the structure should become more complex and taller, because the increased employee number, it require a tight control of the company, and set rules and guidelines for employee to make sure the company as a whole to achieve the goal of the company. Even if it leads an increased cost of hiring many managers, large company usually require a taller structure to manage their company. For example, British Gas, it is the biggest energy supplier in UK, one of the Big SIX. It is using tall structure with functional structure to divide products as electricity and gas, services and other functions. Moreover, The Salvation Army that I mentioned in last post, it is also using a tall structure as their organizational structure. But everything also has exception, Google normally using Flat structure to manage its company.

The management of flat structure only has few layers, and the span of control should be wide with a short chain of command. The advantage of flat structure is good for some innovative and creative company like Google. Google is such like an exception, because flat structure usually use in small organizations, which is easier communication between employee and manager. Based on size and shape of the company, flat structure provide the environment that really good for communication and decision making, which much faster than tall structure. The main benefit of this structure is, the company can base on the changing of their business market to set up a plan and quickly change their decision or strategy.

Matrix structure is a structure that the management style combining with product and functional. In fact, this structure can use both flat structure and tall structure. Because of the complexity, the top manager have to balance the chain of command, the subordinates usually are shared by different type of manager such as project managers and functional managers. This means the employee sometime needs to report to two managers. Nowadays, there are so many companies use matrix structure in their company. For instance, The Boeing Company, it is one of the largest global aircraft manufacturers in the world, its product line include fixed-wing aircraft, rotor craft and  rockets. They design  and manufactures their own products, and sell it. In fact, each of the department manager as a vice president in the company. They form as a team from different department and when the projects are completed, the member in the team will reform and work on other project.