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Organisational Structures

Many businesses are very complex organisations with many hundreds or thousands of people working in them in all sorts of different roles. In order to manage these resources effectively, businesses organise people in different ways. These are referred to as organisational structures.

Organisational structures include the different relationships between people in an organisation. In some cases, an employer might want to have a very formal relationship between people in the organisation in others it might be far more relaxed.

Think about your school or college, for example. Do you call your teachers or lecturers by their surname, their first name or do you call them 'miss' or 'sir'. What about the teachers/lecturers themselves? Do they call each other Ms P, 'Mrs X' or 'Mr Y' or do they refer to each other by their names? How do they talk to the head or principal?

When there are a number of people in an organisation, there may be specific ways in which a business organisation expects people to behave to each other. Copyright: Carlos Chavez, from stock.xchng.

How people are expected to refer to each other in the organisation might start to tell you something about the type of organisation it is. It might also give you some clues about the different levels in a business and how each of these levels relates to the other.

Different levels in a business are referred to as hierarchies. A hierarchy occurs where people are given some sort of title or rank that signifies their importance in the organisation. In a business this might be important in determining who might take responsibility for decision making, who has to be reported to and who might ultimately be to blame if things go wrong (or who can take the credit if things go well!)

Some businesses have lots of hierarchies whereas others have very few. The amount depends on what the business might feel is appropriate in terms of helping to generate the right relationships between people in the organisation. Some organisations might need to have very strict levels of responsibility resting with certain people. This might be because decision making might have serious consequences. Can you think of examples where this might be the case?

Other businesses will organise its levels of responsibility in different ways - often with the intention of providing a message to all in the business about the way in which it expects people to behave and how relationships are to be encouraged.

The following are some typical examples of ways in which a business might represent how it is organised using different structures:

Hierarchical:

This structure shows people's position in the business and the layers of responsibility that are associated with that level. The Chain of Command shows who reports to whom within the hierarchy. In your school, it might be that the line manager of a teacher in the business studies department is the head of department. The head of department, in turn, might be responsible to the head of faculty, who reports to the deputy head who then has the Head as his/her line manager.

A hierarchical organisation chart in a typical school. The chart shows different levels of responsibility at each level.

Matrix Structure:

Other types of organisational structure do not emphasise a hierarchy. In a matrix structure, each individual may have a specific role or function and may work within a functional area but the matrix structure is designed to show that every person in the organisation has an important role to play. It does not suggest that one person's role is any more important or valuable than another.

This diagram shows how a matrix structure might be represented. It is based around the way in which Biz/ed is organised. There are five people working on the main part of Biz/ed. Each person has a role to play and we all rely on each other to carry out those roles and to support the others in helping them do their jobs effectively.

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