08 Organisational Structures That Every Business Should Consider

Organisational structures outline a company’s roles, teams, and employees in a hierarchical manner. A company’s organisational structure describes what employees do, who they report to, and how decisions are made. It is a minimum requirement that your organisation structure includes employee titles and basic hierarchies.

However, before you look into organisational structures, getting a commercial license is an important part of setting up a company. A commercial license in Dubai enables you to sell everything from food to toys to electronics as long as the requirements are met. Once you have your commercial license, you can create organisational structures that cater to businesses of specific sizes and industries based on functions, markets, products, and geographies. Organising your company can also help your new hires learn who manages what processes as your company grows. Read how biggest companies hire the best talent.

1. Functional organisational Structure

An organisation with a functional organisational structure would group all of the marketers, salespeople, customer service people in separate departments. Employees are able to specialise within the functional structure, and the structure is easily scalable if the organisation grows. The structure is mechanistic, which inhibits an employee’s growth, but skill-based departments allow employees to focus on what they do well and find out what their strengths are.

2. Product-Based Divisional Structure

Typically, divisional organisation structures have multiple, smaller functional structures (e.g., each division has its own marketing and sales teams). A product-based divisional structure is one in which each division within the organisation focuses on a specific product line. Having this type of structure is ideal for organisations with multiple products and can help reduce the time it takes to develop products. As a result, small businesses are able to launch new products quickly.

3. Market-Based Divisional Structure

There is also a market-based structure of divisional organisation, which divides an organisation according to markets, industries, or customer types. A market-based structure is ideal for organisations that have products or services that are unique to specific markets, and it is particularly effective if the organisation has advanced market knowledge. Additionally, this organisational structure keeps the business constantly aware of changes in the demands of its different audiences.

4. Geographical Divisional Structure

In a geographical organisation structure, divisions are based on geography. Geographic structures can be divided into territories, regions, or districts. This type of structure is ideal for organisations that need to be close to their suppliers and customers (for example, to deliver or provide on-site support). Additionally, it allows geographical divisions to make decisions from various perspectives, bringing together many forms of business expertise.

6. Process-Based Structure

The end-to-end flow of different processes is the basis of process-based organisational structures. A process-based structure, unlike a strictly functional structure, takes into account both the activities employees perform and their interactions. Process-based organisational structures make it possible to improve the speed and efficiency of a company, and it is best suited for industries that undergo rapid changes since it is easily adaptable.

7. Matrix Structure

Organisations with matrix structures do not follow the traditional hierarchical structure. Instead, all employees report to two different managers. It is common to have both functional and product-based reporting lines. Due to the fact that there are two chains of command instead of just one, the matrix structure provides both flexibility and a more balanced decision-making process. Multiple business lines overseeing a single project offers them the chance to share resources and communicate more openly with one another – something they might not have the chance to do otherwise.

8. Circular Structure

A circular structure is also based on hierarchy, with the employees on higher levels occupying the inner rings and those on lower levels occupying the outer rings. Nevertheless, in a circular organisation, the leaders or executives do not sit atop the organisation and send directives down. Their vision spreads outward from the centre of the organisation. From an ideological standpoint, a circular structure encourages communication and free flow of information throughout an organisation.

9. Flat Structure

Due to the flat organisational structure, all staff members are only a few steps away from leadership. There is also a possibility that it might not always take the shape of a pyramid, or even any shape for that matter. Furthermore, it is also a form of the “Organic Structure” which is quite detailed. An environment with less hierarchy-related pressures may also make employees more productive. The structure might also make staff feel more equal to their managers rather than intimidated by them as superiors.

An organisation’s structure is essential to running a successful business because it allows for improved efficiency, better communication, and alignment of employees with the company’s objectives. A business’s daily operations are directly affected by it. The combined efforts of a company’s employees, along with its systems and processes, enable it to make better decisions for its future when it establishes a structure that works.