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Secondly, work is performed more efficiently since each manager is responsible for a single function.
For instance, a firm can operate in the United States or Europe or sell products focused on a specific group of customers. Although each one operates as a separate entity that caters to different consumer segments, they are all under the company Gap Inc. General Electric is another ideal example; it owns numerous firms, brands, and assets across different industries.
Although GE is the umbrella corporation, each division works as an individual firm.
A type of organization serves as a framework that a firm can use to establish authority among employees and communication structures.
However, it is crucial that a company chooses a type that suits its needs best.
Also referred to as a bureaucratic structure, a functional organization is one that divides a firm’s operations based on specialties.
Ideally, there’s an individual in charge of a particular function.The CEO is responsible for the overall success of an organization and for making top-level managerial decisions.Read a job description The term "knowledge worker" was first coined by Peter Drucker in his book, The Landmarks of Tomorrow (1959).Considering how vital an organizational structure is to the different facets of the business, managers should take their time determining the type of structure to take on.This article highlights the main types of organizations that currently exist.A flat organization is unlike any other corporate structure. While individuals may keep an expertise, hierarchy and job titles are not stressed among general employees, senior managers, and executives. Flat organizations are also described as self-managed.The idea behind this organizational structure is to reduce bureaucracy so as to empower employees to make decisions, become creative problem solvers, and take responsibility for their actions.It means that every employee receives tasks and is accountable to a particular specialist.A functional organization confers several benefits. For one, there’s a total specialization of work meaning that every employee gets professional guidance from a specialist.However, this organization works best for companies with large-scale projects. They include a clear articulation of the company’s mission and objectives, effective use of limited resources, and retention of professionals throughout the life of a company.Additionally, a matrix structure provides a practical way of integrating the firm’s objectives with operations.