Many types of organizational and managerial structures have been established in the scientific literature and practice, but each of them has its application, advantages, disadvantages, and distinctive features.
From the point of view of the functional characteristics and objects of application they are linear, linear-functional, linear-staff, matrix, program-target, functional-block, design, subject, and situational.
From the point of view of their construction, they are hierarchical and horizontal, centralized and decentralized.
And in terms of territorial or other scope-central and local, national, global, regional, and territorial.
Linear management structures
They are characterized by a direct impact on the production cycle, in which all management functions are performed by one person. Each subordinate has only one leader. This is a classic pyramidal structure of government.
Usually, it does not exist in its pure form, but as a linear-functional or linear-staff management structure. In the construction of linear structures, the basic principle is uniformity, with the maximum concentration of rights and responsibilities.
There is a strong centralization and there are mostly formal-direct connections. The linear structure does not contain feedback.
The advantages of this type of structure are that there is a strong unity with a high degree of coordination and unity in actions between manager and subordinate, the information is transmitted quickly and there is effective control over the implementation of decisions.
However, the disadvantages are more. It is impossible to apply the linear structure in complex objects. There is a lack of flexibility in the system, horizontal connections, and the possibility for coordination and coherence of actions. The solution of operational problems dominates over strategic ones. In addition, these types of structures are difficult to adapt to changes in the system and environment.
Linear structures are applied mainly in the creation of organizations and individual units with a limited number of functions. They are used in sites of low complexity, where the manager can cover the management process. Most often they find their place in the transition from manufacturing to industrial production.
Linear-functional management structures
The main reasons for their occurrence are the development of the organization and the related main problems such as more precise screening of information and movement in the system. Preserving the advantages of the linear and functional model and greater coherence and coordination between the processes.
The main thing in this management structure is the rationalization of the management process by basic functions. A system of services is formed for each function. This form offers the high competence of specialists and is especially convenient when performing routine tasks.
Line managers in this structure perform mainly strategic tasks. They develop the market, investment, and technology policy and coordinate the activity of the functional units. The linear units are formed for the management of activities of leading importance for the managed object such as research, design, trade, and others. The functional bodies, on the other hand, do not have a direct management influence on the sites.
The development of them is coordinated with the center and becomes an active regulator mediated by the line managers. When they have to carry out an activity they wait to be imposed and pointed out as a necessity by the relevant line management. These are, in fact, the elements of this structure, and without them, it does not exist.
The advantage over other management structures is that it is the most universal. It can grow into both divisional and product and at the same time become sustainable, with a long life cycle. Its system is flexible, wide open to the environment, can provide competent management of internal processes and structures. Central management can successfully regulate the behavior of the system in strategic directions, and centralization and decentralization can be successfully combined.
Like any other structure, the disadvantages go hand in hand with the advantages. It is a structure that is difficult to adapt to. The transmission of information between functional units is difficult and delayed, which affects the speed of decision-making. Problems are discussed throughout the bottom-up hierarchy in each unit. To solve these problems, they are first discussed within the unit, then the information is passed to a higher level. This leads to an increase in the volume of work and makes coordination between the individual units more difficult. the various functional units communicate with difficulty. The optimum in decision-making is provided at the functional level, not at the company level. The heads of the functional units avoid accepting risk and responsibility, which makes the given company unadaptable to the environment.
Application of the linear-functional management structure
The application of the linear-functional structure is in large complex systems with dynamically growing and changing structures and activities. This form of management offers high competence of specialists and is especially convenient for routine tasks that require frequent contacts between different management decision-making services that require time.
Functional management structure
It is built based on functional organizational relations between the structural units at different levels, realizing one or another function and conducting their activity based on coordination of the forms and methods.
The simplest is the form with three obligatory cores – finance, trade, and production. The relationship between the line managers and the general manager is carried out through a functional coordinator. thus it becomes indirect and reduces the efficiency of communications. Like the linear structure, this one does not exist in its pure form and is usually a combination of the principles of the linear, staff, and functional management structure.
Management functions that serve the entire system and require high specialization of staff are performed according to their affiliation. Connections and communications are carried out vertically, and the coordinating unit is the head. The units of the control subsystem receive orders from the functional bodies and the manager.
The advantages of a functional management structure
The advantages of this structure are: there is a division of powers and management work on the functional and target structure of the management system, unity of competencies, multidirectional of diverse impacts on the management object, which leads to high professionalism and a broad view of the organization.
Disadvantages of functional management structure
The disadvantages or most of them are due to the advantages of the structure in its implementation. The production activity is divided into basic functional services, which raises the problem of coordination between them. The worker turns out to be subordinate to different people – he is just part of the production system. Too much attention is paid to the specialization of production.
The functional structure has a clear structural character. The market orientation of the company is weak. In addition, senior management is usually overburdened, which complicates the decision-making mechanism. Overcoming these shortcomings requires the transfer and processing of large amounts of information. General functional units for inter-functional coordination are revealed, and the result is an increase in the information arrays, more expensive management, or overburdening of the central management. thus new shortcomings of the structure appear and the circle continues.
Application of the functional structure
The application of the functional structure is oriented to small medium-sized enterprises and organizations operating in a stable environment. Functional security makes it possible to service complex high-tech activities on the territory of one site and to minimize additional service and support processes and external services.
Linear functional-staff organizational structure of management
In essence, it is primarily a linear structure with the corresponding advantages and disadvantages of this model but extends the life cycle of functional models. The first functional and staff structures at the sectoral level emerged as a means of vertical integration.
Gradually, the branch system became functional from new centralized associations. Thus, the functional-staff structures for the management of many factory production associations are formed, where standing at the top of the line of functional subordination is supplemented by a central headquarters, duplicating the functional administrative services.
And at the level of the individual enterprise, the functional system becomes a line-staff.
Advantages and disadvantages of a linear functional-staff organizational structure of management
The advantages of this model are that the main departments are united on the principle of functional services. Sales, procurement, manufacturing, research, and development are independent departments within the company. Coordination and a good level of governance are being achieved.
The disadvantages are the same as for the linear and functional structure, as well as their application.
Divisional management structure
It is the most common governing structure, especially in the post-World War II period. A study of 227 American and 291 Japanese companies shows that in the US 94, 4%, and Japan 59, 8% of them have this type of structure.
One of the main reasons for the transition from a functional to a divisional management structure is the tendency to diversify production. It is the result of a certain evolution that begins with functional specialization. In the period of the 1940s and 1950s, an intensive process of formation of relatively independent divisions began, which determined the nature of the divisional structure.
They become the main production and economic units in the structure of decentralized corporations. Each division consists of several factories and has the status of “profit center4”, “sales center” and “investment center”. They are independent, headed by a general director, subordinate to the company’s headquarters.
An important issue in the formation of the divisional structure is the relationship between the “center4” and the “periphery”. The center is formed in the General Directorate and the periphery – around the relatively independent departments.
This structure exists in several varieties, the most common being the divisional-product or so-called product structure.
Product management structure
The main building block is the divisions of specific products, which leads to significant flexibility and constant swarming of new divisions with a high degree of independence. A differentiating feature is a homogeneous product or group of similar interchangeable products.
The great autonomy of the product departments gives grounds for some authors to call this structure a “federal organization”.
It was first applied in 1910. Within the divisional structure with product divisions, there can be three approaches – high centralization, minimal integration, activity, and direct compliance with the requirements of market competition.
The advantages of the product structure are mainly reduced by the fact that each independent unit carries out a full cycle of production and economic activity. This leads to an orientation towards high and stable profit and occupying good positions in the market.
For this purpose, sometimes you build your own sales network, which is an important tool in competitive work.
The shortcomings are related to the strong duplication of functional services at the level of headquarters and at the level of divisions, which leads to the need for a clear delegation of rights and responsibilities. In addition, the reduced control over the activities of the divisions leads to difficulties in pursuing a unified policy. There are also difficulties in securing staff with a broad training profile for department heads.
Another variant of the divisional structure is the regional one.
Regional management structure
The main sign of differentiation is the area of activity of a certain regional market. Territorial differentiation is subordinate to the product-industry division. It is applied mainly to transnational corporations, oil monopolies, and food producers when there is a high homogeneity of the production product.
Sometimes the so-called “bell” concept is used, in which the structure is based on the department inside the country and abroad built on the principle of product specialization of production, as the individual services are in the headquarters, not in the departments and serve groups of regional offices.
The divisional-innovative management structure
When time uses an immanent feature of change, there is a divisional innovation structure.
In it, the divisions dealing with perspective problems are divided into separate units. Two approaches are possible:
1. Characteristic of enterprises with an aggressive market strategy, operating in an unstable and variable and there is a clear division of staff services into current and future.
2. An approach where there is a complete separation of the activity for development and assimilation of the production of new products in independent “profit centers”, which do not deal with the assimilated production at all. Corporate development groups are established. An example of such an enterprise is the company “Eskop”, which has allocated 1 billion. dollars for the study of alternative energy sources, forming an independent unit for this purpose.
But in general, this type of structure is expensive and there is a high risk of possible failure of innovative ideas.
Matrix management structures
Initially, this structure was used in military affairs, to unite the efforts of many different specialists to work on a particular project. It is a mixed organizational form in which the vertical hierarchy accumulates a set of horizontal powers that place the need for coordination of activities. The matrix structure is a means for organizational integration of diverse types of activities from the standpoint of common goals. The application of this type of structure and its introduction into management is influenced by three conditions:
- 1. there is equal importance of two or more aspects of the organizational activity, testing the impact of specific external requirements.
- 2. to have increased information load of the management system.
- 3. acute shortage of qualified specialists, the use of which occurs at different times and in different places of work.
The main problem of the matrix structure is the interaction and integration of the different types of activities.
The advantages of the matrix structure are that it provides unity of horizontal and vertical integration. There is also a high degree of coordination and coherence in action. Opportunity for wide qualification of the staff and increase of the managerial and production-technological culture.
The disadvantages are also not small. It inhibits innovation, long-term trends are unclear, and is prone to bureaucratization. Double and sometimes triple obedience leads to clumsiness, the possibility of conflicts, and people’s insecurity in the new and insufficiently defined situation in the formation of this structure. There is a shortage of specialists, complexity in the relationship between subordinates and managers.
Application of the matrix control structure
The application of the matrix management structure is oriented mainly in organizations operating in a complex environment and when there are complex, heterogeneous responsibilities that need to be coordinated to solve a single goal. Experience shows that this model requires precisely developed management and production technologies. The model of this structure is defined as complex, applicable in a limited number of systems, and requires a high degree of qualification of all employees.
Program-target management structures
Management practice requires an approach in which they build specialized units to integrate decision-making processes and develop rules, programs, and relevant procedures for their implementation. The program-target structure works with such an approach.
The program body can be set up within any structure. It has a logic of functioning and management, and its relations with the governing bodies are strictly regulated. In cases where decisions can be made, this must be done jointly and dominated by the highest governing bodies. highly qualified specialists from the program body can manage or control the implementation of the decisions or projects.
Advantages and disadvantages of the program-target management structures
Advantages – there is an increase in flexibility, adaptability, and opportunities for rapid concentration of management staff in solving problems and situations. There is an opportunity for rational use of the qualification of the staff. Senior managers are relieved of current responsibilities. The complexity of management is increasing, and the transition to new structures is taking place more smoothly and without conflict.
Disadvantages – are related to the increase in the number of management units and the number of staff. the functions and functional units are duplicated, the responsibility of the managers is reduced and the movement of information is complicated. And this leads to difficulties in adapting the model to change.
Application – mainly in large organizations with active and innovative behavior. In the implementation of large projects of market, scientific, technological, or humanitarian significance. It is also applied in other organizations, but mainly as temporary program bodies and with much more limited functions and powers.
Functional-block management structures
Some authors also define them as cybernetic, with their closeness and autonomy of the processes in the blocks. There are five main blocks. This is a new organizational form, but it is not widely used in practice. To apply, they need to have a high management culture, staff qualification, well-developed management technologies, and information security systems. Their routine and formal approach can make management more expensive and change the management structure without good results.
A great advantage of this structure is the possibility for typification and unity of management at all levels and the introduction of uniform principles in management.
Situational management structures
They are built-in systems with dynamic functional responsibilities of the structural units and individual specialists. Building situational models in large hierarchical organizations are associated with difficulties such as the need for sustainable relationships, professionals, and the division of labor.
This structure is a typical model of a “horizontal” structure. most of the decisions on the implementation of to read are assigned by the executive or by the scientific councils. Management can be performed by the pyramid structure, but when it comes to administrative resource security processes.
However, these structures have a very strictly defined perimeter of rights only in their subsystem. There are only service functions for the system as a whole. The possibility for building new units is practically unlimited, the staff is mobile between the different units, the decisions are made collectively, and the motivation for their implementation is great. It is necessary to master more than one specialty, and this creates difficulties.
The application of this type of structure is still present in a limited number of organizations with great intellectual potential and high production and management culture. Many attempts have been made to apply it in the industry.
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Network management structures
This type stands out with the functional peculiarity of the structural units according to the necessary qualification for the given unit and the goals to be realized. The information is received directly from the units at the “lowest” hierarchical level.
These are the so-called flexible units, for example for modeling, marketing, design, and make independent decisions in a given field. The possibilities for the functioning of this structure are connected with modern technologies and systems for information provision. The information is available to all units and there is no problem for decision-making at each level.
The advantages of the network structure are that it has the lowest number of hierarchical levels with a low degree of bureaucracy. The control system is comprehensive, functioning in the conditions of cooperation and mutual assistance.
The relations are mostly informal, the structure is dynamically changing, adaptive, market-oriented, and with high innovative creativity.
The disadvantages are mainly that there is no possibility for duplication of functions and resources. This structure is not applicable in large organizations with a large product life cycle and dominant hierarchical relationships.