5 Organizational Model Examples: Which To Use?

Traditional, matrix, centralized, decentralized, linear, horizontal, traditional… There are a few different organizational model examples, each of which is better suited to a specific business type and process model.

In this piece, Startups Basics will look at five of them and explain their benefits and drawbacks so you can decide which one to use in your company.

Hierarchical Organizational Model

The most frequent sort of organizational structure is one in which the chain of command runs from the top (e.g., the CEO or manager) to the bottom (e.g., entry-level and low-level employees), with each employee reporting to a supervisor.

Pros	Cons
Levels of authority and accountability are more clearly defined. Shows who each individual reports to or to whom certain initiatives should be addressed. Employees are motivated by clear career routes and advancement opportunities. Each employee is assigned a specialization. Creates a sense of belonging among colleagues in the same department.	Increased bureaucracy has the potential to stifle innovation and major reforms. Employees may act in the best interests of their department rather than the corporation as a whole. Lower-level employees may feel as if they have less ownership and are unable to communicate their thoughts on the company.

Functional Organizational Model

A functional org structure, like a hierarchical organizational structure, starts at the top with the highest levels of responsibility and works its way down. Employees are primarily arranged based on their individual skills and the company’s related purpose. Each section is overseen by a different person.

Pros	Cons
Employees can concentrate on their tasks. Specialization is promoted. Encourage self-determination in teams and departments. Is easily expandable for any business size	Within a company, it can generate silos. Communication across departments is hampered In a firm, uncovers processes and strategies for various markets and goods.

See more: Common types of Crowdfunding

Horizontal Or Flat Organizational Model

Companies with few layers between higher management and staff-level personnel benefit from a horizontal or flat organizational structure. Before they become large enough to carve out various departments, many start-up enterprises adopt a horizontal organizational structure, but other organizations keep it since it fosters less supervision and more participation from all employees.

Pros	Cons
More responsibility is given to employees. Makes communication more open Enhances collaboration and the pace with which new ideas are implemented.	Employees have no apparent supervisor to report to, which might cause uncertainty. Employees with broader abilities and expertise are more likely to be produced. When a firm grows past the start-up stage, it might be tough to manage.

Matrix Organizational Model

A matrix organizational chart resembles a grid and depicts cross-functional teams formed for specific projects. For example, an engineer may work in the engineering department (which is overseen by an engineering director) on a regular basis, but on a temporary project (led by a project manager). Both jobs and reporting linkages are accounted for in the matrix org chart.

Pros	Cons
Allows project managers to quickly select employees based on project requirements. Provides a more dynamic image of the company. Encourages employees to apply their expertise in roles other than their original ones.	Allows project managers to easily choose individuals who meet the project’s needs. Gives the company a more lively image. Encourages employees to use their skills in positions other than their current ones.

Team-based Organizational Model

It should come as no surprise that a team-based organizational structure divides workers into teams—think Scrum or tiger teams. A team organizational structure is designed to deconstruct old hierarchies by focusing on problem-solving, collaboration, and providing employees more authority.

Pros	Cons
Breaks down silo thinking, which boosts productivity, performance, and transparency. It encourages you to think about how you can improve yourself. By allowing employees to move laterally, it disrupts traditional career structures. Seniority is not as important as experience. Minimal supervision is required. Fits in nicely with Scrum or Tiger teams in agile enterprises.	It goes against the natural tendency of many businesses to have a strictly hierarchical structure. Employees’ career prospects can become less obvious.