Have you worked in an organization where roles were not defined, everyone pitched in to do any task, and communication with the owner or general manager was informal? Have you experienced an organization where roles were formalized, work was compartmentalized into departments, a hierarchy of management existed, and you were constrained to communicate with peers and your immediate supervisor most times? Both of those organizations have an organizational structure born out of the organization’s strategy, objectives, and culture.

Organizational structure refers to the manner in which the authority, roles, coordination of work are assigned and governed. The design of an organization’s structure will determine how resources and information flows in an organization.

This chapter begins with the building blocks of organizational structures and then explores different configurations of organizational structures.