Most modern organizations follow one of five organizational structures.
These structures are simple, functional, divisional, matrix and network. A
corporation may also use any combination of the five structures to support
short to long term strategy.
According to Wheelen and Hunger, simple structure has no
functional or product categories and is appropriate for a small company,
such as a sole proprietorship. Functional structure is appropriate for a
medium-sized firm with several related product lines in one industry.
Divisional structure is appropriate for a large corporation with many
product lines in several related industries. In matrix structures, functional
and product forms are combined at the same level of the organization. A
network structure is characterized by its virtual elimination of in-house
Classic design theory represents an approach that is still used in
manufacturing, This design emphasizes on division of labor,
standardization of tasks, hierarchy of authority, equal authority and
responsibility, unity of command, limited span of control, separation of
line and staff, and decentralization.
However, in recent years, changes
have been made to this structure in order for manufacturing firms to be
competitive in a global economy.
Alfred Chandler concluded that structure follows strategy - changes
in corporate strategy lead to changes in organizational structure. Chandler
conducted research using several large U.S. corporations. Changes in the
environment tend to be reflected in changes to corporate strategy and lead
to changes in corporate structure. Experts agree that organizational
structure will vary within different industries and that there is no optimal
After reading Bolman and Deal along with the Strategic
Management text, I have concluded that no one organizational design is
any better than any of the rest . A company must use a design that
supports the growth and profitability of its organization. Research has