1. Linear Organization:
- Linear organization is the most simple and ancient type of organization.
- This format of organization is used in Army since a very long time and so it is also known as Army organization.
- In linear organization, the top level holds the maximum power. In other words, the power is centralized at the top level.
- The distribution of power and responsibilities is done in straight line from top level to bottom level. .
- Since, the distribution of power is in a straight line from top to bottom level, it is called linear organization.
Formation of linear organization:
- In a linear organization, the greatest power is with the Board of Directors. They take policy based decisions for the organization.
- The Board of Directors empowers the General Manager.
- The General Manager is the main Administrative Head. It is his work to ensure that the lower employees follow the task and decisions taken by the Board of Directors.
- Below the General Manager are the various departments such as production department, administrative department and sales department.
- For each department there is a department head. The department head is responsible for the work going on his entire department.
- Under each department head there are several officers. For example, there will be purchase officer and production officer in the production department. Similarly there will be administrative officer and accounts officer in the administrative department, etc.
- Under such officers, supervisors, foreman and clerks, etc. work. Finally, the workers work under the foreman. ‘
2. Functional Organization:
- Linear organization gives more importance to department than work. This is the greatest limitation of this kind of structure.
- Keeping this limitation in mind, the ‘work based’ or say ‘function based’ organization came into existence.
- An organization with a functional structure is divided based on functional areas, such as IT, finance, or marketing. ’
- In this structure, the experts with specialized knowledge are given special responsibilities for areas of their expertise. This type of structure is called functional organization. For example, Human Resource Manager will look after the recruitment, transfer, promotions, etc.
Formation of functional organization:
- The core of functional organization lies in giving special importance to work distribution on the basis of specialization.
- Specialized experts are appointed for each kind of work. These experts do not serve only as advisors but they are also administrative heads of their work areas. They are fully responsible for the task assigned to them. For example, the purchase officer is fully responsible for ail type of purchase-related work.
- The Chief Executive Officer is at the top and holds the supreme powers of the functional organization.
- A unit can be divided into two (or more) parts. Each unit has its assigned list of activities and works.
- The units then assign the tasks and works to different officers. For example, the factory unit (or department) will assign the work to Quality Control Officer, Chief Maintenance Engineer and so on.
- Each officer then gives orders to the employees under him to perform the task.
3. Formal Organization:
- In order to achieve the predefined goals, the formal structure of relationship established among persons and work is called formal organization.
- Linear organization and functional organization are types of formal organization.
- In formal organization, necessary powers are given to enable the person to perform certain kind of responsibilities.
- The organization also clarifies matters related to delegation of authority among superior officers.
4. Informal Organization: In the formal organizational structure, individuals are assigned various job positions. While working at those job positions, the individuals interact with each other and develop some social and friendly groups in the organization. This network of social and friendly groups forms another structure in the organization which is called informal organizational structure.
- The informal organizational structure gets created automatically and the main purpose of such structure is getting psychological satisfaction.
- The existence of informal structure depends upon the formal structure because people working at different job positions interact with each other to form informal structure. So, if there is no formal structure, there will be no job position and there will be no informal structure.
- The members while doing the formal work also interact at social level, bring their own values and assumptions during work discussion. The members of informal organization develop friendship, alliances, trusted sources of information and share preferences on how work should be done.
5. Matrix Organization:
- The organizational structure in which people with similar skills are pooled for work assignments, resulting in more than one manager is called a matrix organization.
- Matrix organization is a combination of work based (functional organization) and project based organization.
- For example, all engineers may be in one engineering department and report , to an engineering manager (i.e. part of functional organization structure), but these same engineers may be assigned to different projects and report to a different engineering manager or a project manager while working on that project. Therefore, each engineer may have to work under several managers at same point of time.
Formation of matrix organization:
- In this type of organization, several project managers are appointed for various projects and each project manager is given different type of work responsibilities.
- The responsibility of the project manager is to successfully complete the project assigned to him that too on time.
- For each project, a pool of employees is made from different areas of the company. Each of these employees holds some specific skill which is needed by the project.
