There are three ways to organize an enterprise: by function, by product or service line or by some combination or matrix. Variations are possible depending on local realities, technology, number and types of products and services, geography and the rate of change affecting the organization. These types of organizations reach their limits after a while. Functions will build in-depth expertise - and high walls. This makes it difficult to introduce new products or services. Infrastructures based on product or service linesmaintain flexibility for changing demands; yet, the cost is in reduced ability to remain in touch with state-of-the-art marketing, engineering, manufacturing, financial and human resource concepts. The traditional matrix model minimizes the extreme downsides of the other two options while not capturing the full upside benefits. Overlaying these bodies is the control/decision making process (see: The Management Continuum) of the steward/leader/manager groups.
The structures fall within four (4) basic types, in order of increasing flexibility and response to internal and external factors are:
1. Hierarchical,When you assess the issues and problems common to your organization look at your organizational structure. It will tend to be a contributing factor to recurring problems that take your time and resources away from more productive uses. Companies reorganize because any weakness in a structure eventually saps its strength. Also, if you want to shift management systems, eg: empowerment, participation, partnership, and the like; you must change your organization to accommodate the management change. If you do not change the structure to support your shift, then the new culture will not take hold.
3. Socio-technical, and,