What is the best organizational structure for a company?

Since the beginning of time, human beings have organised themselves through social structures. From the tribes to the small settlements, we have evolved to create more complex systems with fixed rules aimed to make us cooperate and achieve certain goals together. It is the same in the business environment, where we use different organizational structures designed to adapt the companies to the dynamics of each era.

When we speak about organizational structures we are talking about the plan that describes the way the different elements that make up a company interact with each other. The structure represents how the resources and team will be managed to achieve a specific goal.

Structures

Over the time, these structures have evolved to leverage the employees' labor to improve general results. In this context, we can talk about three main structures:

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Vertical or top down structure

The most classical structure is where the hierarchy and the chain of command are very clear. Each employee receives orders from on single manager of a higher rank. Communications goes exclusively from the top to the bottom, with no feedback or horizontal interaction. The manager establishes, coordinates, manages and reviews everything. This is a model that works well with some companies but as all the responsibility falls on the same person, it can lead to many issues if they make a mistake.

Horizontal structure or network

Even though there's still a fixed hierarchy, there's a group of people who work together to achieve a goal. If the previous structure was all about maximizing individual productivity, this one includes horizontal interactions that connect all the employees for a greater good. They work in teams but each of them plays a specific role and there is no interaction between the different groups.

Team-based structure

This one is an emerging trend based on recent improvements in certain areas like the management of space, technologies and collaborative systems. The main novelty lays on the decision-making and task assignation. The employees are organized in independent groups managed by a single leader and tightly connected to the rest of the teams. These groups can be temporal, formed by experts from different departments who work on a specific project and then split off once it is over. The main advantage of this system is the great collaborative environment where the members feel equal and secure, which encourages creativity and brainstorming.

Hopefully this article will help you learn about the different options you have to organize groups of professionals inside a company. The chosen structure defines the way each group will work so we suggest you take the time to investigate which one fits your business model better so you can get the most out of it.

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