Company Structure: Functions, Organization, and Models

Posted on Dec 17, 2024 in Social sciences

Functions Organization

The organization is the function that aims to design a structure where all functions are defined to be performed by each person who is part of the company and its responsibilities and authority. In addition, the organization aims to order the set of relationships that may arise between the various tasks and between all areas of operation of the company.

Steps of the Role of Organization:

  1. Determine the levels of organization. Define who controls and executes tasks within the company.
  2. Assign functions for each individual. Objectives must be clear and concrete.
  3. Each person should know what they have to do and who they should obey.
  4. There must be internal and external communication channels within the company.

Internal Communication:

  1. Vertical:
    • Ascending: From bottom to top. The aim is that managers know the problems of workers.
    • Descending: From top to bottom. Its purpose is to inform workers of the objectives of the company.
  2. Horizontal Communication: It arises between people who are within the same hierarchical level. Communication may be oral or written.

A) Organization of Work

It is the set of rules that are intended to coordinate all the means available to the company so that with minimal costs and efforts, the objectives are obtained.

Maslow’s Theory:

Qualified human relations in five levels must meet progressively. These requirements are a source of motivation that disappears as they are satisfied. Maslow will represent these needs in a pyramid:

  1. Physiological Needs: Eat and drink, keep warm, etc. The individual comes to believe that if food is guaranteed for life, they will be happy and not wish for anything more.
  2. Security Requirements: Defined as a contract, insurance, retirement, etc.
  3. Social Needs: These bring together the needs for love and affection, to feel accepted by the community, to feel respected in the company, etc.
  4. Esteem Needs: Confidence in oneself, fame, prestige, that values the ability to work in a person, etc.
  5. Self-Actualization Needs: It is the desire to be more and get to where the person is capable. In this case, in the company: to be chief or director.

This structure is not rigid; there are people who think ahead of the estimated status. Furthermore, it is necessary to have fully satisfied a need for the emergence of another.

The Formal Organization

Is the intentional structure defined and identified in the companies, located in each of the elements in the most convenient way. One of the main conditions for the organization to work is that each of its elements knows the role it has to perform and the authority and responsibility it has. For the formal organization of the undertaking to be well defined, it must be well structured. This requires knowing:

  1. The division of labor. You can make a structure according to the tasks they perform, so are the departments.

This division is classified into Departments:

  • Department for functions: Workers are organized according to their specialization.
  • Department of geographic areas: The workers are organized so they know the area to which the product is intended.
  • Department of products: They are used in companies that manufacture more than one product.
  • Department of processes: The work is organized according to phases of the production chain.
  1. Communication between elements of the company. We distinguish:
  • Linear Relations: Occurs when there is a link between orders, i.e., a person commands and the other obeys.
  • Staff and advisory team Relations: Its purpose is the advice by specialists.
  • Functional relationships: It is a collection of specialists who have the authority and responsibility.

Given the division of labor and the existence of a relationship of authority and hierarchy among people who are part of the company, managers must determine the organizational structure that is more advantageous.

Classification of Organizational Models:

  1. Hierarchical linear model: It is based on the principle of command, i.e., all members of the company depend on a superior. This model is valid for small and medium enterprises.
Pros:
  • The simplicity and ease of authority is well defined.
  • The speed in decision making.
Disadvantages:
  • Lack of expertise by managers.
  • Excessive concentration of authority.
  • Lack of flexibility to adapt to changes.
  • Lack of motivation for subordinates.
  1. Functional model: It is characterized by the existence of specialists. Above them, there may be multiple leaders.
Pros:
  • The site may have specialists.
Disadvantages:
  • Employees can receive orders from more than one boss.
  1. Model and advice online (STAFF): It has a central structure in a hierarchical fashion with the support of the departments of counseling.
Benefits:
  • Allows the intervention of specialists.
Disadvantages:
  • The decisions are slow, and advisory departments represent a cost to the company.
  1. Model in committee: Cooperation is characterized by several people assuming authority and responsibility.
Benefits:
  • Decisions are taken from several points of view.
Disadvantages:
  • It takes a long time to make decisions.
  1. Matrix model: It is characteristic of industrial enterprises. In this model, there is dual authority. Each person receives orders from the project director and director of their department. However, one of the two authorities is often superior to the other, in this case, the project manager.
Pros:
  • It is a flexible organization.
Disadvantages:
  • It is necessary to coordinate all the people involved in the project.

Organigrams:

These are graphic representations of the structure of the business organization in a synthetic and simplified way, and they present the main features of these structures.

Classification:
  1. Under its shape: They can be:
  • Vertical: They aim to highlight the chain of command. The positions that have more authority are at the highest places, and beneath them are the subordinates.
  • Horizontal: The control units are located at the left and right.
  • Radial: They try to create a visual impact to highlight the highest levels of management.
  1. According to its purpose:
  • Computer flowcharts: Give global company information.
  • Analysis flowcharts: Show the whole company’s organizational structure in a detailed way.
  1. According to its extension:
  • General flowcharts: They reflect the general structure of the company.
  • Detailed flowcharts: Report on the organization of a particular department.
  1. Based on its content:
  • Organizational structure: Only represent the units that comprise the company and staff relations.
  • Organigrams: Represent only the names and positions of persons who occupy different functional units.
  • Organigrams: Reflect the structure formed by each unit.

C) Informal Organization:

The set of personal and social relationships that is not predetermined by the management and organization of the company, but that arises spontaneously when people are associated with each other.