What is an organizational structure? Basically, it's pretty straightforward. Organizational structure refers to the way an organization is set up to achieve its goals most efficiently. Organizations may be structured in a variety of ways. We'll talk about a few of the more common ones, starting with functional organization. The functional organization is the most basic, simplest organizational structure. In a functional organization, tasks are grouped according to a specific operating function, such as production or sales. A functional organization provides the structural framework, from which other organizational structures are built. The line-and-staff organization is the most common form of organizational structure. It attempts to render a large and complex enterprise more flexible without sacrificing managerial authority. Typically, work is carried out in accordance with specialized functions, and authority is exercised in a hierarchical manner. A line function is one that directly advances in organization and its core work, such as production or sales. A staff function supports the organization with specialized advisory and support functions, like human resources and IT. Armies are a great example of this type of structure, with the soldiers out front doing the fighting, basically line employees, and the people providing support behind the lines, like supplies and medical services or staff. Organizations can be structured in other ways too. In the divisional or a product organizational structure, all of the functions needed to make a specific product, are gathered under one high level manager. For an example, an automobile manufacturer would likely have one manager in charge of building pickup trucks, the light truck division, and another in charge of building passenger cars, the car division. In a geographic organizational structure, the organization divides its activities according to the geographic region, in which they take place. For example, most pharmaceutical sales reps have a defined territory for which they are responsible. In a customer organizational structure, activities are organized according to the types of customers the organization serves. For example, manufacturers often sell both directly to consumers, B2C, and through other retailers, B2B, and have separate groups of employees dedicated to each. In a matrix organizational structure, employees have dual reporting relationships, generally to a functional manager and a product manager. Reporting relationships in a matrix organization are much more complex than in more traditional hierarchical organizations. This type of organizational structure allows supervisors or project managers, to call upon the skills of personnel with various functional specialties, until a project is completed. This specialized information exchange, allows managers to respond quickly to the needs of customers and the organization's goals. However, requiring employees to report to more than one supervisor can be problematic, because the organizational structure is complex. Some employers may be confused as to who their supervisor actually is. The existence of dual authority may also cause division among employees and managers. Communication is more complicated too, and miscommunication may lead to dissatisfaction and ineffective management. The matrix organizational structure is typically used in research and development organizations, construction companies, and engineering firms, for major projects or contracts. A matrix organizational structure is best suited for projects, task forces, or other one of a kind enterprises. No structure is universally best for all organizations and in all businesses. Some absolutely will not work in certain cases. For example, a matrix structure would never work for a military or a service organization. Organizations need to decide for themselves what type of structure would be best for their needs. Structures do tend to evolve over time though, mostly by giving employees more of a voice in how things are done. Most factories, for example, still operate in a line and staff manner, just as they did 100 or more years ago. But workers today have much more of a say in how things are done and are expected to provide feedback on how different tasks and policies are working.