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What Is Organizational Structure And Company Overview

What Is Organizational Structure And Company Overview

What is organizational structure? Why is organizational structure so important to a business or even in office rental? Let’s find out right below the article.

What is organizational structure?

What is organizational structure?  

What is the organization?

An organization is defined as a collection of two or more people working together in certain structural forms to achieve specific common goals.

What is organizational structure?

Organizational structure is defined as a visual diagram of a company that is used to define roles, powers, and responsibilities assigned hierarchical arrangement, and effective coordination to accomplish goals. common goals of the enterprise.

An organizational structure will depend on the organization’s goals and strategies. In a centralized structure, the top management has most of the decision-making power and tight control over departments and divisions. In a decentralized structure, decision-making power is allocated to each department at different levels.

Organizational structure refers to the hierarchy of not only a business but also of any organization such as a charity, government agency, agency, or educational institution, developed to establish how an organization operates and helps the organization achieve its goals and objectives.

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Organizational structure is affected by what factors?

The growth of the company

A significant factor affecting organizational structure is the growth of the company. As a company grows, the impact on the structure of the organization is significant. This is especially true when a company begins to expand into other geographies and the structure of the organization is spread out.

Customer’s demand

Customer service is so important in business, that many companies have created multiple departments dedicated to customer service and retention. If a client awards a large contract to the business, they may need to rearrange parts of their organization to fit the contract. As customer needs change, the company’s organizational structure may change as well.

Technology – engineering

The page “The Reference for Business” points out that as computer networks become ubiquitous, it is easier for people to work in groups. Everyone doesn’t have to be in the same room or building to be productive. Technology can create necessary positions within the company and eliminate unnecessary positions.

4 popular organizational structure models of enterprises in the office rental

4 popular organizational structure models of enterprises in the office rental

There are many organizational structure models of enterprises such as functional organizational structure model, product-based organizational structure, market-based organizational structure model, process-based structure model, matrix organizational structure, circular organizational structure… In this section, we will only focus on understanding the 4 most popular models of enterprises.

Functional Organizational Structure

A functional structure is a type of structure in which a business is divided into several smaller departments with specific tasks or roles. For example, a company may have 1 IT department, 1 marketing department, 1 finance department, etc.

Each division has a manager or director who is responsible for answering a higher-ranking executive and is responsible for managing various divisions. For example, a marketing director is responsible for reporting to a vice president who oversees the three departments of marketing, information technology, and finance.


Employees are grouped based on their skills and responsibilities, so they can put all their energy into performing their departmental roles.


Because of the division of duties between departments, there is a lack of communication between departments, with most management issues and debates taking place individually within each department. For example, department A and department B are working on the same project, but the expectations and details for each specific job are different, which will lead to problems in the future.

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Geographical Divisional Structure

Under this structure, each department will operate as a separate company, controlling the resources and costs spent on each specific project. In addition, this structure can be divided into departments according to specific geographical locations such as Saigon South area, Southeast region, …


Offers greater flexibility for large companies with multiple departments, allowing each division to operate as a separate company with 1 or 2 people who will regularly report back to the parent company or the parent company. senior managers.


Lack of good communication between departments.

In addition, tax legal issues may be involved.

Matrix Structure in organizational structure

Matrix Structure in organizational structure

The matrix organizational structure is a hybrid form that optimizes the strengths between the functional structure and the project structure.

In a matrix structure, employees can report to two or more bosses depending on the situation or project. For example, an engineer at a large engineering company may work for one boss, but when on a new project there may arise a need for technical expertise. For the duration of that project, the employee will also report to that project manager, as well as his or her boss, on all day-to-day tasks.


Employees can share their knowledge across different functions, allowing for better communication and understanding of each departmental role.

Employees can expand their skills and knowledge, leading to professional advancement and benefiting the company’s growth.


May cause confusion and conflicts of interest and power struggles.

This is a complex type and can result in unforeseen costs.

Flat Structure

Flat structure (or horizontal organizational structure) is the type that is used a lot in startups or small companies. This structure smoothes the hierarchy and chain of command and gives employees autonomy. Companies using this structure have a high operating speed.


There is some view that employees can complete work more effectively in an environment under pressure related to hierarchy. It allows employees to create many initiatives in the workplace as well as remove the “red tape” that inhibits the growth of the business.


It can be confusing and inconvenient if the people involved don’t agree with the way the structure is organized. For example: if there is a time when groups within an organization disagree on something, such as a project, it can be difficult to align and stay on track without executive decisions from one leader or manager.

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