The basic types of organization are described below
Line and staff
The line and staff organization was the type favoured by the classical theorists. Although the term is not so much used today, except when referring to line managers, it still describes many structures. The line hierarchy in the structure consists of functions and managers who are directly concerned in achieving the primary purposes of the organization, for example manufacturing and selling or directing the organization as a whole. ‘Staff’ in functions such as finance, personnel and engineering provide services to the line to enable them to get on with their job.
Divisionalized organizations
The process of divisionalization, as first described by Sloan (1963) on the basis of his experience in running General Motors, involves structuring the organization into separate divisions, each concerned with discrete manufacturing, sales, distribution or service functions, or with serving a particular market. At group headquarters, functional departments may exist in such areas as finance, planning, personnel, legal and engineering to provide services to the divisions and, importantly, to exercise a degree of functional control over their activities. The amount of control exercised will depend on the extent to which the organization has decided to decentralize authority to strategic business units positioned close to the markets they serve.
Decentralized organizations
Some organizations, especially conglomerates, decentralize most of their activities and retain only a skeleton headquarters staff to deal with financial control matters, strategic planning, legal issues and sometimes, but not always, personnel issues, especially those concerned with senior management on an across the group basis (recruitment, development and remuneration).
Matrix organizations
Matrix organizations are project based. Development, design or construction projects will be controlled by project directors or managers, or, in the case of a consultancy, assignments will be conducted by project leaders. Project managers will have no permanent staff except, possibly, some administrative/secretarial support. They will draw the members of their project teams from discipline groups, each of which will be headed up by a director or manager who is responsible on a continuing basis for resourcing the group, developing and managing its members and ensuring that they are assigned as fully as possible to project teams. These individuals are assigned to a project team and they will be responsible to the team leader for delivering the required results, but they will continue to be accountable generally to the head of their discipline for their overall performance and contribution.
Flexible organizations
Flexible organizations may conform broadly to the Mintzberg (1983b) category of an adhocracy in the sense that they are capable of adapting quickly to new demands and operate fluidly. They may be organized along the lines of Handy’s (1989) ‘shamrock’ with core workers carrying out the fundamental and continuing activities of the organization and contract workers and temporary staff being employed as required. This is also called a core–periphery organization. An organization may adopt a policy of numerical flexibility, which means that the number of employees can be quickly increased or decreased in line with changes in activity levels. The different types of flexibility as defined by Atkinson (1984) are described in Chapter 14.
Line and staff
The line and staff organization was the type favoured by the classical theorists. Although the term is not so much used today, except when referring to line managers, it still describes many structures. The line hierarchy in the structure consists of functions and managers who are directly concerned in achieving the primary purposes of the organization, for example manufacturing and selling or directing the organization as a whole. ‘Staff’ in functions such as finance, personnel and engineering provide services to the line to enable them to get on with their job.
Divisionalized organizations
The process of divisionalization, as first described by Sloan (1963) on the basis of his experience in running General Motors, involves structuring the organization into separate divisions, each concerned with discrete manufacturing, sales, distribution or service functions, or with serving a particular market. At group headquarters, functional departments may exist in such areas as finance, planning, personnel, legal and engineering to provide services to the divisions and, importantly, to exercise a degree of functional control over their activities. The amount of control exercised will depend on the extent to which the organization has decided to decentralize authority to strategic business units positioned close to the markets they serve.
Decentralized organizations
Some organizations, especially conglomerates, decentralize most of their activities and retain only a skeleton headquarters staff to deal with financial control matters, strategic planning, legal issues and sometimes, but not always, personnel issues, especially those concerned with senior management on an across the group basis (recruitment, development and remuneration).
Matrix organizations
Matrix organizations are project based. Development, design or construction projects will be controlled by project directors or managers, or, in the case of a consultancy, assignments will be conducted by project leaders. Project managers will have no permanent staff except, possibly, some administrative/secretarial support. They will draw the members of their project teams from discipline groups, each of which will be headed up by a director or manager who is responsible on a continuing basis for resourcing the group, developing and managing its members and ensuring that they are assigned as fully as possible to project teams. These individuals are assigned to a project team and they will be responsible to the team leader for delivering the required results, but they will continue to be accountable generally to the head of their discipline for their overall performance and contribution.
Flexible organizations
Flexible organizations may conform broadly to the Mintzberg (1983b) category of an adhocracy in the sense that they are capable of adapting quickly to new demands and operate fluidly. They may be organized along the lines of Handy’s (1989) ‘shamrock’ with core workers carrying out the fundamental and continuing activities of the organization and contract workers and temporary staff being employed as required. This is also called a core–periphery organization. An organization may adopt a policy of numerical flexibility, which means that the number of employees can be quickly increased or decreased in line with changes in activity levels. The different types of flexibility as defined by Atkinson (1984) are described in Chapter 14.
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