Introduction to Organization Structure

Topics: Organizational structure, Project management, Organization Pages: 13 (2498 words) Published: November 7, 2012
Introduction to organizational structure
An organization structure refers to an arrangement of people, relationship and responsibilities in carrying out company activities to achieve goal. In addition it also can define as how a people in the organization are group together and to whom they report. Formal structure is needed for larger organization that decisions have to be made about the delegation of various tasks. In an organization structure clearly indicate and separate between the work activities which define by their job role. In good organization structure should explain the relationship of authority who reports to whom and for managers, who reports to them. An organization structure usually illustrated graphically in an organization chart.

There are several types of organization structure such as functional organizational structure, geographic organizational structure, matrix organizational structure and product organizational structure. Functional organizational structure refers to a group of people in the organization or department that hold similar position and perform similar task. It also indicates that who reporting to whom. The traditional way to of the organization, this is organizing people by function.

A Geographic organizational structure is typically found in companies with operation spread over a large region. This includes national and international office. It will have internal structure and management layers depending on each location. While matrix organizational structure combine two or more types of organizational structure usually is product organizational structure and functional organizational structure to create a unique blend of work environment. Product organizational structure is the departmentalization based on product and. Employee work in difference unit where by each unit holds the responsibilities of producing the product or service. This structure also known as a division structure. Base on this organizational structure every product structure will lead by division. Each division will responsible for each product.

1.0 Functional Structure
According to O’Toole.S “The term organizational structure refers to how the people in an organization are grouped and to whom they report. One traditional way of organizing people is by function. Some common functions within an organization include production, marketing, human resources and accounting”. Base on this definition we can say that in functional structure employee are grouped together into department and hold similar position also perform similar task.







HR officer

FOL Manager

EOL Manager



HR Assistants

Payroll officer





Appendix 1.0: Sample of Functional Structure for Company ABC Referring to above chart, it clearly divided the task and responsibilities by function. Example for this company has four main functions which are finance, human resource, manufacturing and engineering. Every department has a difference roles and responsibilities. Finance department focus on accounting and payroll, where by manufacturing can concentrate on execution in order to deliver a good result by divided into two main focus which is FOL and EOL. Both were lead by area manager to ensure the efficiency of the result. For engineering department also separate into two main focuses, they are test and equipment engineering. Each


function plays a role in order to achieve the company goal. Base on their expertise the result given will be very fast, efficiently and effectively.
1.1 Advantage of Functional Structure
The advantage of functional structure is employee can communicate and share information easily as they are grouping together according to similarities in their position. Beside...
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