Organisational structure refers to the way that tasks and responsibilities are allocated to individuals and the ways that individuals are grouped together into offices, departments, and divisions. Mangers often describe their organisation by drawing an organisation chart which shows the structure of an organisation and the relationships and relative ranks of its profits and positions. When small businesses are started, they consist of an owner, manager and a few employees so an organisational structure is unnecessary at this stage. As an organisation grows to become an established business, it will adopt one of a number of organisational structures to implement its strategy.
There are a number of different structures (the allocation of tasks and responsibilities to individuals) an organisation can choose. They include a functional structure, multidivisional structure or a matrix structure. The matrix structure is more complex than the other forms of structure. It combines different structural dimensions simultaneously, for example, product divisions and geographical territories or product divisions and functional specialism.
The matrix structure has certain advantages and disadvantages:
1.They are effective at knowledge management because they allow separate areas of knowledge to be integrated across organisation boundaries. Particularly in professional services organisations. Can be helpful in applying particular knowledge specialism to different market or geographic segments. E.g. for a particular client – people with particular knowledge specialism (strategy/organisational design) tied with people grouped with particular markets (industry sectors or geographic regions. Example: education specialists – various age groups
2.Matrix organisations are very flexible because they allow different dimensions of the organisation to be mixed...