Question

You have been hired as the Human Resources director by a tech company located in Jackson, MS. It currently has 200 employees located in Jackson as well as in California. It has been operating as a start-up with little to no organization as most of the original employees were friends from college. They have grown to a size, though, where they need organizational structure. They expect to double in employee size in three years. Their workforce includes tech-oriented employees as well as accounting and marketing/sales employees. What kind of organizational structure would you recommend? What are the pros and cons of your suggestions?

Answer 1

Organizational structure defines the work structure or activities in the organization like- coordination, task allocation and supervision. There are four types of organizational structure that mostly companies can use to manage their employees as well as company’s organizational structure always help to determine the success.

• Functional Organizational structure

• Divisional Organizational structure

• Matrix Organizational structure

• Flatarchy Organizational structure

Because company is small and they have multiple divisions with more than 200 employees. We can use the Functional organizational structure. In the Functional organizational structure, we divide each department into the smaller parts with their specific roles and task. We can take an example - In a company, a group of people specializes in their work like a group of people working for information technology, group of people working for marketing and HR.

Each department or division have to directly report to the higher authority or the CEO of the company.

Some of the pros of the Functional organizational structure are:

• Employees can join the group or division according to their skills. Which can help them to increase their effectiveness.
• There is an operational clarity among the employees.
• Communication between each department can promote the friendly environment in the organization.

Some of the cons of the Functional organizational structure are:

• In the long term, employees get bored. Which ca lead to decrease their work efficiency.
• Growth is limited.
• Sometimes lack of coordination among the group can affect the company.