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Types of Organizations and Their Differences
When organizations are in their initial stages, they operate without following any specific structures. Upon experiencing growth, these organizations require being structured so that all functions and services can be looked after properly. As a result, organizations end up being organized into a structural format. Most often, organizational forms help in giving importance to the services or products of an organization.
Task groupings are capable of illustrating how structural elements are utilized in organizations. Logics serving varying purposes can provide base for positions that are able to be grouped. With shared expertise and experience, tasks are grouped accordingly with time horizons, functions, processes, or geographical locations kept in mind. The following are the common types of organizational structures.
Diversified Organizations
Upon the diversification of an organization’s services, the generic functional form which the organization may have been following becomes inefficient. Tasks are always subject to varying time constraints and with diversification the overall size of structures is enlarged. As a result, all kinds of tasks and responsibilities assigned to the organization are carried out precisely. The diversified organization form is also applicable to product specific organizations which are dealing with the manufacturing of more than one product. Organizations move to diversification to ensure each of its products is looked after properly with all production requirements, technical makeup, and markets are catered to properly.
Matrix Organization
The matrix organization offers an alternate format to the product or functional structures. The matrix structure is applied when other structural methods fail to work. Matrix management is used in attempt to superimpose a one approach to grouping logic. In this regard, it is to be kept in mind that organizations hardly ever use the matrix structural form for their entire selves. They rather assign the form to project or product specific tasks while the organization in its entirety sticks to another organizational structure
The United States government invented matrix management in the second half of the 20th century when contractors were required to work according to project management structures which was necessary to carry out projects with research and development.
Divisionalized Organization
Divisionalization is a method of structuring organizations when they grow bigger. A divisionalized organization requires forming sections which are supposed to carry out their respective jobs with all divisions reporting to one decentralized unit responsible for the organization’s overall prosperity. Generally, organizations are divided into divisions which are based on geography or product. Divisionalized organizations have several reporting lines.
Divisionalization was originally implemented by organizations in the United States’ business industry. These organizational structures were constructed to assign division managers profit responsibility. As a result, they ended up dividing businesses into sections. Different jobs were assigned to different departments, with all divisions working for a single organization.
For teams that are growing and developing with every passing project, it is essential that they stay focused on the future and the possibility of prospering into an organizational structure. As such, knowing which possible shapes and functions they can adapt is necessary.