Call Us: US - +1 845 478 5244 | UK - +44 20 7193 7850 | AUS - +61 2 8005 4826

company Data Visualization

Pros and Cons of the Functional Structure
Also known as the bureaucratic structure, the functional structure breaks up the company based on the specialization of its workforce. For example, you may have departments or teams dedicated to manufacturing, sales, marketing, human resources and finance. This is the most common type of organizational structure in the United States.


Members of the group can easily communicate with one another, which allows for fast decision-making and greater operational efficiency.
Members can also learn from one another because people with similar skill sets work shoulder to shoulder.

The different functional groups may work in silos. This leaves them susceptible to tunnel vision, with each work group perceiving the organization only from its own frame of reference.
Employees have little personal autonomy, which potentially decreases adaptability and motivation.
Pros and Cons of the Divisional Structure
With a divisional structure, the company breaks into distinct business sectors based around a product, project or subsidiary it operates, or around a geographic location. A car manufacturer, for example, might have one division dedicated to the production of luxury sedans and another dedicated to the production of SUVs. Each division has its own manufacturing, IT, finance and marketing department to support the needs of that division.


A divisional structure works well for companies that have a large product offering and for those that work in many geographies.
The failure of one division does not impact the operations of the other divisions, which gives the business flexibility.

The business must duplicate many core functions across multiple divisions, which can be inefficient.
This organizational structure can be complicated from a tax and accounting perspective.
Pros and Cons of the Flatarchy
The flatarchy or team structure is a modern invention that aims to address the failings of the functional model. As the name suggests, it flattens the hierarchy and puts individuals with complementary skills into smaller working teams. Those teams are given a lot of autonomy and can choose how they work toward the company goals.


Fewer (if any) management layers are cost-efficient and promote faster decision-making.
The lines of communication remain open and clear throughout the organization.

Management could easily lose control and may find it hard to establish a base level of responsibility and accountability for the work and the organization as a whole.
With no boss to report to, employees can become confused about their roles.
Pros and Cons of the Matrix Structure
Companies that adopt a matrix structure group employees by both product and function, or by region and product, or by region and function and product. The matrix can be as big and as complicated as the company wishes. This means that each employee would have a number of different departments, divisions and managers. For example, an employee may have duties in both customer service and sales.


Matrix structures are more dynamic than functional structures because staff can share information widely across task and departmental boundaries.
Matrix structures ensure that individuals with specialist knowledge are assigned to the project with the greatest need.

The chain of command becomes increasingly complex under this type of structure, which may blur the lines of accountability and lead to conflicting loyalties among employees.
There may be gridlock in decision-making if a manager of one matrix disagrees with the manager of another matrix. Large organizations with a need for constant cross-departmental communication benefit most from this model.