Types of Business Organizational Structures

 
1. Entrepreneurial Structures.
   Entrepreneurial structure is the most basic form of business structure. It is a feature of small and growing business. It composed of the owner and its workers. Most business initially starts with this business structure, subsequently as business grows they changed into functional and divisional structures. This type of business structure can most seen in retail shops which require day to day attention of the owner cum manager.
   
   
2. Functional Structures.
   Functional structures is next to entrepreneurial structure regarding its complexity. Most medium to large sized business have this form of business structure in practice. It analyze all business processes into separate activities or tasks. Each function is responsible for performing these task, allocated based on expertise of personnel in that function to perform such . It allows all the similar work is gathered into one area of the business. It eliminates duplication of tasks and encourages economies of scale. Example purchasing computer by purchase department on centralized basis, this would allow them to gain bulk purchase discounts which would otherwise be not possible if every person is ordering computers separately.
   
   
3. Divisional Structures.
   Divisional structures is another form of business structure. It is found mostly in larger organizations. Divisional structure is often used to combination with functional structures. As the business grows in size it begin to offer its goods or service in geographical locations and deals in range of goods and services. Consequently, business begin to operate in Divisions by product, customer group and geo-location. Manager is appointed to manage the business for each product or geo-location to manage the profitability of product or operate the business in particular location taking into account culture and risk of that location.
   
   
   Each division has its own functional departments. They account for its own cost and earns revenue within authority granted to them. You can imagine them just like separate business and each separate businesses are united to form large business unit.
   
   
4. Matrix Structures.
   Matrix structures are the most complicated business structures and most difficult to manage. Matrix structures are feature of large multi-national companies who have expertise and resources to manage such structures. Some industries and innovative fields in which products are non-repetitive and technical in nature uses this type of business structure like construction business in which each building in different from each other. Matrix structure is a combination of functional and divisional structure. In this business structure each employee has two bosses, one is the functional manager and the each is product or geo-location wise divisional manager. Example employee in the production department is responsible to production manager (Civil engineer) for production scheduling and also responsible to product manager (Sale manager) to report on likely completion date of the product (building).
     
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