The skeleton of the companies "Organizational structure"

Companies like human beings have a skeleton called "organizational structure" this guarantees coordination between departments and employees, define relationships of authority, hierarchical levels and scope of control. These organizational structures have chains of command which are the lines of authority that unites all the employees of an organization and shows the flows of information, these chains have a management span which represents the number of employees that report to a supervisor.

These structures can be decentralized, which means that the decision authority moves towards the lower levels of the organization, or centralized, which means that the decision authority is close to the higher levels of the organization. Traditionally, companies present a centralized organization model. This model has many advantages due to the coordination of internal communication, although its processes are usually bureaucratic, which can also delay decision-making, on the contrary, decentralized processes have independence, which promotes rapid decision-making reflecting less hierarchy contributing to a creative and autonomous environment.

Structures can have different levels of focus, the book "Understanding management" shows us 5 different approaches:

1. Functional approach, in which people are grouped by common skills and resources, is the most traditional and common approach in the business world.

2. Divisional approach, focus occurs when departments are grouped based on similar organizational outcomes.

3. The matrix approach has a combination of functional and divisional has an efficient use of resources, employees can report to two supervisors which can create confusion in the controls.

4. The team approach provides a way of delegating authority, bringing responsibility down to lower levels, allowing for flexibility and responsiveness in a complex global environment.

5. Virtual network approach, is based on the subcontracting of its main functions among its great benefits are the reduction in costs and flexibility, although in the absence of ties with the company there may be fewer employee commitments.

Each company is free to choose the type of structure it wants to have and not all structures work for all companies, I would like to talk about the case of Apple (watch next video) where in an interview Steve Jobs about his team-based approach, He talks about how the key to the company is based on collaboration instead of having a hierarchy, they have specialists who work with very little supervision.

Reference:

dfraggd. (2014, April 10). Steve Jobs - Organizational Structure. YouTube. https://www.youtube.com/watch?v=xcTtQ0hiHbE

Daft, R., & Marcic, D. (2018). Undertanding Management (11th ed.).