Organizational Structure

Published by MBA Skool Team, Last Updated: January 22, 2018

What is Organizational Structure?

An organisational structure, which is predominantly a hierarchy of the employees and the functions, is essential in order to streamline operations and processes within an organisation.  The popular organisational structures include:

Functional Structure: In this case, the organisation is divided into segments based on the functions performed by the employees. This helps to increase efficiency in each function. It is generally used in large organisations.

Functional Structure

Divisional Structure: In this case, the organisation is divided into divisions which could be based on the product, Markets or Geographic area. Each division has its own set of functions like finance, marketing etc., like small micro organisations within one large organisation.

Divisional Structure

Matrix: The matrix structure is typically a hybrid version of both the functional and divisional structures.

Matrix Structure

Pre-Bureaucratic: Found in startups, No standards with a centralised structure and usually one decision maker.

Bureaucratic: Standardized structures and suitable for large organisations.

Post-Bureaucratic: Follow strict hierarchies but open to modern ideas and methodologies.


This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.

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