A Guide to Organizational Structures
When you’re guiding business growth, organizational structure quickly comes into play. Who is reporting to whom? Is there a system of checks and balances? Structure is an important aspect because it clarifies and guides the division of responsibilities and authoritative positions. One of the key benefits is that it provides flexibility, making it easier to add new positions in the business as it expands.
Organizational structures vary among industries so it’s crucial to know which one will benefit your team the most. We’ve dug up five structures, old and new, to help you navigate the growth of your business!
The structure we all know (and sometimes love), hierarchy models a linear chain of command. Information trickles down from top to bottom and direct communication usually only occurs between levels.
A flatter structure in comparison to the hierarchical opens communication between the team levels, allowing for a more even distribution of power. This is one of the most practical, scalable structures across a variety of industries.
Flat organizations are a kind of free-for-all structure, meaning there’s no seniority. Also known as self-managed organizations, if a team member takes on a project, they’re responsible for the management and development. This isn’t always practical for larger organizations but operates well for startups and small environments.
A combination of hierarchy and flat organizations, this structure is extremely dynamic and can work in any business size. In most cases, it’s used as a temporary structure, but it’s becoming more common as organizations develop specialized teams.
Better suited for smaller and medium sized organizations, holacracy is based on circles, which in most cases are departments. This structure doesn’t hold a top command, but instead, allows for distributed decisions.