Types Of Organizational Composition Business Essay

Many of the big organizations have didn't understand the value of aftereffect of good organizational design on the company's success and performance. Choose any one corporation which experienced substantial adjusting problem due to the poor organizational design and explain at length its structure and consequences of that organizational structure.

Organization Framework is a platform, typically hierarchical, within which an organization arranges its lines of expert and communications, and allocates rights and duties. Organizational structure can determine the manner and amount to which functions, power, and tasks are delegated, controlled, and coordinated, and exactly how information flows between degrees of management.

An structure will depend on entirely on the organization's objectives and the strategy chosen to achieve them. In a centralized structure, your choice making power is concentrated in the very best part of the management and limited control is exercised over departments and divisions. In a very decentralized structure, your choice making ability is sent out and the departments and divisions have varying degrees of autonomy. An organizational graph illustrates the organizational framework.

Every organization, to be effective, must have an organizational structure. It is the form of composition that establishes the hierarchy and the reporting composition in the organization. Additionally it is called organizational graph. There are different types of group set ups that companies follow depending upon a variety of things; it could be based on physical locations, products or hierarchy. To put it simply an organizational framework is a plan that shows the organization of work and the systematic arrangement of work.

An organizational composition includes activities such as activity allocation, coordination and guidance, which are aimed towards the achievements of organizational seeks. It can even be regarded as the viewing goblet or perspective by which individuals see their firm and its own environment.

An group can be organized in many various ways, depending on their objectives. The structure of an organization will determine the methods where it functions and executes. Organizational framework allows the portrayed allocation of tasks for different functions and procedures to different entities including the branch, department, workgroup and individual. Organizational structure affects organizational action in two big ways. First, it offers the foundation on which standard operating strategies and routines slumber. Second, it decides which individuals get to take part in which decision-making operations, and thus from what degree their views condition the organization's actions.

Types of Organizational Structure

Organizations are create in specific ways to perform different goals, and the framework of an organization can help or hinder its progress toward achieving these goals. Organizations large and small can perform higher sales and other gain properly complementing their needs with the framework they use to use. There are three main types of organizational composition: functional, divisional and matrix composition.

Different Types of Organizational Structures

Traditional Structures

These will be the structures that are based on functional department and departments. They are the sort of structures that follow the organization's rules and procedures to the T. they are simply characterized by having precise power lines for many levels in the management. Various types of buildings under traditional constructions are

Line Structure - This is the sort of structure that has a very specific type of demand. The approvals and orders in this type of structure come from top to bottom level in a lines, hence the name brand structure. This sort of structure is suited to smaller organizations like small accounting organizations and law offices. This is actually the sort of framework that allows for easy decision-making and it is also very informal in nature. They have got fewer departments, making the entire firm a very decentralized one.

Line and Staff Composition - Though brand structure is ideal for most organizations, especially small ones, it isn't effective for bigger companies. That's where the line and personnel organizational structure comes into play. Line and composition combines the range framework where information and approvals come from top to underlying part, with staff departments for support and field of expertise. Line and personnel organizational structures tend to be more centralized. Managers of collection and personnel have expert over their subordinates, but personnel managers haven't any authority over line professionals and their subordinates. The decision-making process becomes slower in this type of organizational composition because of the layers and guidelines that are typical to it. Also, let's remember the formality involved.

Functional Composition - This sort of organizational composition classifies people based on the function they perform in their professional life or based on the functions performed by them in the organization. The organization graph for an operating organization consists of Vice Leader, Sales department, Customer Service Department, Engineering or production department, Accounting department and Administrative department.

Divisional Structures

These are the kinds of buildings that are founded upon different divisions in the organization. These constructions can be further divided into

Product Composition - Something structure is based on arranging employees and focus on the foundation of the various types of products. If the business produces three different kinds of products, they have three different divisions for these products.

Market Structure - Market composition can be used to group employees on the basis of specific market the company sells in. A business might well have 3 different markets they use and relating to this framework, each will be a separate division in the composition.

Geographic Composition - Large organizations have offices at different place, for example there may be a north area, south zone, west and east area. The organizational composition would then follow a zonal framework.

Matrix Structure

This is a framework which really is a combo of function and product structures. This combines the best of both worlds to make a competent organizational framework. This structure is the most complicated organizational composition.

Some Other Types of Organizational Structures

Bureaucratic Structure - This sort of structure is seen in tall organizations where tasks, processes and techniques are standardized which type of structure is ideal for huge corporations that involve complicated operations and require simple administration of the same.

Pre-Bureaucratic Composition - This structural form is best exemplified in chiseled organizations where supervision and control are centralized and there is very little, if any, standardization of jobs.

Network Composition - In this type of structure, the business managers are required to maintain and coordinate business/professional relations with third parties such as clients, sellers and associates to be able to achieve a collective goal of success and growth. Most of the time, these relations are retained and duties are coordinated via telecommunications and electronic advertising and, hence, this kind of composition is also called Virtual Framework.

Team Structure - Organizations with team constructions can have both vertical as well as horizontal process flows. The most different feature of this organizational structure is that different responsibilities and operations are allotted to special teams of staff so as a harmonious coordination is struck among the many task-teams.

It is important to find an organizational structure that is most effective for the organization as the incorrect set up could hamper proper working in the organization.


Organizational structure refers to the network of associations among individuals and positions in an organization. It could be defined as founded pattern of associations among the different parts of the organization. It is the formal system of process and reporting romantic relationships that handles, coordinates and motivates employees. It helps in associating them and working alongside one another to attain organization's goals. Organization structure is similar to the construction of an organization. Organizational set ups imply formal connections with well identified duties and responsibilities. It also means to the hierarchical associations between superior and subordinates within the organization. It helps in coordinating various jobs and activities that are designated to different persons and departments.

Organizational structure assists with having group of policies, procedures, requirements and methods of analysis of employee's performance. It ought to be developed according to needs of people in the business.

Organizational structure performs significant role in effective and efficient functioning of organization. There are numerous need for organizational structure and they are the following

1. Clear trim authority relationships: Organizational framework helps in delivering authority and responsibility among employees in an organization. It indicates the obligations and responsibilities worried about particular post to concerned persons. It can help in recognizing assignments for each worker and his accountability to the business. In addition, it correlates relationships of one organizational member to the other associates.

2. Pattern of communication: It offers the habits of communication and coordination within an organization. Organizational composition assists with grouping activities and folks and so it facilitates communication between people focused as their job activities. The showing of information helps person in dealing with their joint problems.

3. Location of Decision Centers: It decides the positioning of centers of decision making j in the business.

4. Proper Balancing: It can help in creating proper balance and lays emphasizes on coordination of group activities in the organization.

5. Stimulating creativity: A competent and sound group composition provides well described patterns of specialist that stimulates creative thinking and effort among associates of the business. Every organizational member comprehends his vitality and utilizes it to efficiency to get understanding in the organization.

6. Encouraging development: It offers the framework within which an enterprise functions. In the event the structure of business is versatile then it will help in meeting obstacles and creating chance for growth. It can help in facility growth of the venture by increasing its capacity so that increased degree of activity can be managed.

7. Utilizing Technical Improvements: Adaptability to the change in a sound organizational structure and to make maximum use of most advanced technology. It modifies the existing pattern of authority responsibility relationship according to the technological improvements in the organization.


Cisco Systems, Inc. (Cisco), an Internet technology company, had an organizational composition comprising of various cross-functional teams. The key decisions in the company were considered by councils, planks and working groupings. These committees (around 60 by 2009) working at different levels were cross-functional in dynamics, and in line with the company, lent Cisco quickness, scale, flexibility, and swift replication.

Cisco acquired made the change to this type of organizational structure in 2001 and got refined it in succeeding years. Corresponding to John T. Chambers (Chambers), the Chairman and CEO of Cisco, the company got reorganized to break free of the silo culture in the company prior to 2001, such that it could stay agile and impressive in a speedily changing industry.

The company sensed that the original command-and-control model got lost its relevance, and the future would be about collaborate types of decision making. He also said that the new organizational model got served the business well and helped apply its aggressive development strategy amidst the economic downturn.

Industry observers and organizational experts were divided in their thoughts and opinions about Cisco's organizational framework and approach to decision making. Although some industry observers sensed that such a model was effective, others experienced that the management-by-committee way would slow down decision making and impede development. Some experts were extremely critical of Cisco's organizational model. But others thought that if Cisco could further refine the model by dealing with a few of the lacunae associated with it, it might very well be adopted more widely and be accepted as a radical management creativity.


» To comprehend the many issues and difficulties associated with organizational design.

» Discuss the professionals and cons of different types of organizational structures and in the light of this analysis, critically examine Cisco's organizational structure.

» Discuss the pros and downsides of Cisco's approach to decision making.

» Discuss ways that the organizational model at Cisco can be improved upon further.

Complex Organizational Web for Effective Decision Making?

As a leader in switches, routers and other Internet technology, the US-based Cisco System, Inc. (Cisco) likened its business to that of any plumber, i. e. , a plumber of the web.

However, in the first 10 years of the new millennium, the industry Cisco operated in had improved dramatically with the fast rate of scientific change and loan consolidation in the industry. The challenge before Cisco was how to change its business operations so as to focus on the changing market. Regarding to John T. Chambers (Chambers), the Chairman and CEO of Cisco, "The future's about, how will you add intelligence compared to that plumbing? And how do you do it architecturally from a technology viewpoint, going from any device to any content over any blend of systems and data, tone, video? Appears to be simple; really complicated with security and predictability. But how will you change the business process?". . . AccoladesSome industry observers and analysts felt that Cisco's organizational composition and its own collaborative approach to decision making was a highly effective one - possibly the organization into the future. "Now instead of a small group of executives telling everybody else how to proceed, people have expert to figure out for themselves what to do. . .

Background Note

Cisco was founded by several computer experts, who had jointly designed a software system called IOS (Internet OPERATING-SYSTEM), that could send streams of data from one computer to another

Cisco's Organizational Structure

Right from its primary years, Cisco had a set organizational structure. Over the years, the company possessed brought about certain changes in its organizational composition focusing on cross functional groups. . .

Rationale of the Reorganization

Speaking about the organizations framework, Chambers, said, "Our organization structure leverages the power of communities appealing which we call councils which we believe that are $10 billion opportunities, planks that we see as $1 billion opportunities and working organizations. . .

How it Started

The idea for the new composition occurred through the economic down turn in 2001, when Cisco wrote off US$2. 2 billion in deficits. Recognizing the Cisco's hierarchical structure was avoiding it from moving fast, Chambers began grouping executives into cross-functional clubs. . .


In late 2008, while Cisco's stock was witnessing a decrease, analysts said that the business was still in a strong financial position with US$26 billion in cash. "Not only do we've the $26 billion, we now have 26 new market adjacencies that are not highly relevant to our income today, nonetheless they will be 3 to 4 years from now, " said Chambers. . .


Some industry observers and analysts believed that Cisco's organizational framework and its own collaborative approach to decision making was a powerful one - possibly the organization into the future. "Now instead of a small band of executives telling everyone else what to do, people have expert to figure out for themselves what to do. . .


However, some analysts and ex-employees of Cisco were not happy with the new organizational composition at Cisco. The structure led to chaos and slowed down decision making sometimes, they said. "Right now it's chaos because there's very much on everybody's dish, " said Geoffrey Moore, a management specialist who has worked with Cisco. . .

Cisco's Response

Chambers recognized that his critics could be right in their criticism of Cisco's organizational composition and its approach to decision making. However, he said that the business had attained its organizational structure after offering a whole lot of thought to it, consistently refining it since it was created in 2001. . .

Looking Ahead

In November 2009, talking about Cisco's future strategy, Chambers said, "The improving economic outlook combined with what is apparently a very solid execution on our growth strategy due to our organization framework and innovative business model enabled Cisco to move into 30 plus market adjacencies while lowering non-GAAP operating bills by 10% yr over yr and also lowering headcount. ". . .

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