Hi, my name is Candice Elliot, and I am a human resources strategist. I focus on community building as the foundation of building a human resources system in any company that I work with. One of the elements of community building is looking at your organizational structure and how it is that you've designed your organization. In this video, we're going to talk about three different kinds of organizational structures. The first one that we'll start out with is pretty well known. It's called the hierarchical organizational structure. That means that you have a very small number of people at the top, a lot more people at the bottom and you have lots of levels of management in between. Hierarchical business structures are typically found in more bureaucratic or larger organizations. They create clearly defined reporting relationships and people with different levels of power at each level of the organization.
They're typically good at separating functions from other functions. The military has a very hierarchical structure where you have people, folks at the top who are the central decision-makers, and then you have them directing the next level who then directs the next level, who then the directs the next level. This is the hierarchical structure. The next structure that exists is the flat structure. This is a structure that you typically find in newer companies and a lot of entrepreneurial and creative companies tend to like to have flat structures. With a flat structure you have [00:02:00] a person or a few people who are the owners or the leaders of the company. Then, you have a lot of people who are in close communication with those individuals. Creative agencies tend to have this kind of a structure. Like I said, tech companies, a lot of them prefer this kind of a structure.
Te benefit to a flat structure is that there's good communication typically between the lower level of the company and the more senior management of the company. There's just very direct access. There's generally more flexible organizations because people can move and adjust and shift to the changing market based off of direction that they're receiving from management. They're typically, they can, if there are not good structures in place, they can be confusing. Employees may tend to prefer a hierarchical structure if they're more into stability and a very clear understanding and defined role. An employee may prefer a flatter structure if they're more used to taking on multiple responsibilities and they're okay with having a little bit more flexibility in their work.
The last type of a structure that I'm going to talk about is the matrix. A matrix structure is like you have departments that are crossing each other and working together. In a company that has, say, an example would be an architecture and construction company. There are architecture elements, there are construction elements. There are marketing elements. There's business development elements, and there are ways to create a structure [00:04:00] so that all of that overlaps and works together. This is amazing when it works well and there have to be a lot of very, and defined organizational standards and structures in place for a matrix structure to function. Otherwise, it can become a silo for all these different areas, but a matrix works really well if you're having a lot of different departments that need to share a lot of information and to do project management in coordination with each other. Those are the three main types of organizational structures that exist. A lot of businesses will have some combination of all of them. Maybe some projects have the matrix. Maybe the overall structure is a flatter structure, but there's naturally some hierarchy that happens between ownership and frontline staff. I hope that helps you to understand more about what your organization currently looks like and what it might look like as it continues to grow.
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