Organizational

Structures
THE ILLUSTRATED GUIDE
 TABLE OF CONTENTS

CHAPTER 1 03
Introduction: The Importance of Organizational Structure

CHAPTER 2 04
Terms to Know

CHAPTER 3 06
Types of Organizational Charts

CHAPTER 4 13
Examples of Organizational Charts

CHAPTER 5 16
Structuring your Team

CHAPTER 6 18
Building Your Remote Organizational Structure

CHAPTER 7 18
Conclusion
 CHAPTER 1: INTRODUCTION

The Importance of
Organizational Structure
As active members of our vast, ever-changing modern workforce,
we have learned how to go with the flow and proven our
adaptability time and again. This adaptability may look like
anything from navigating new programs to transitioning to remote
work. However, we wouldn’t have been able to keep up with these
exciting work and lifestyle changes if it wasn’t for the security of
organizational structures.

Organizational structures are the backbone of any business

that plans to keep up with their evolving industry. A successful
organizational structure is both an outline of the delineation of
roles and responsibilities and a power distribution chart. Without The world of organizational structures is a
an organizational structure in place, your employees may be left dense one, so we’ll go through them visually
treading water when faced with new projects and tasks. To ensure with organizational structure diagrams. By
your organization remains as efficient and productive as usual, the end of this ebook you will be primed and
create and enforce a concise organizational structure aided by a ready to create the structure that works best
clear org chart. for you and your employees.
 CHAPTER 2

Terms to Know
Before we dive right in to creating our organizational structures,
here are the key terms you’ll want to know moving forward.

1. Chain of Command
One of the most basic elements of an organizational structure, chain of
command, is exactly what it sounds like: an unbroken line of authority that
extends from the top of the organization (e.g. a CEO) all the way down
to the bottom. Depending on the size of your organization, your chain of
3. Centralized and
command can vary in length. But regardless of how long it is, all chains of
Decentralized
command clarifies who reports to whom within your organization.
In your organization, who makes the
decisions? If decision-making power
2. Span of Control is concentrated at a single point or
Your span of control is the number of subordinates a superior at your by a single person, your organizational
organization can effectively manage. The higher the ratio of subordinates structure is centralized. When
to superiors, the wider the span of control. Think of your span of control as decision-making power is spread out
the girthier version of your chain of command. Whereas the chain is a direct through a department or a team, your
lineage, the span of control is a wide claw that can reach across teams and structure is decentralized.
departments.
4. Specialization 6. Departmentalization
Specialization is the degree to which activities or tasks in an Departmentalization is when you group jobs
organization are broken down and divided into individual jobs. together to coordinate common activities
High specialization can be beneficial for an organization, as it allows and tasks. If an organization has rigid
employees to become “masters” in specific areas, increasing their departmentalization, each department or team
productivity as a result and giving your organization the benefit is highly autonomous, and there is little to no
of having experts at your disposal. However, low specialization, or interaction between different teams. On the
“wearing lots of hats,” allows for more flexibility, as employees can other hand, loose departmentalization means
more easily tackle a broader array of tasks. that teams have more freedom to interact
and collaborate. Your organization’s degree
of cross-team collaboration and overlap on
5. Formalization projects and within departments will directly
Similar to specialization, formalization deals with how jobs are affect your level of departmentalization.
structured within an organization. The key differentiator here is
that formalization also takes into account the degree to which an
employee’s tasks and activities are governed by rules, procedures,
and other mechanisms. A formal organizational structure seeks
to separate the individual from the role or position, as the role or
position stays the same regardless of who’s holding it. An informal
organization, on the other hand, places more value on the individual.
It allows for the evolution of a role or position based on an
individual’s preferences, skill set, etc., and places less importance on
what team or department that individual is part of.
 CHAPTER 3

Types of Organizational Charts

Now that you’ve learned the key terms and language surrounding organizational structures, it’s time to explore how you can
combine these ideas to form different types of structures. Each type of chart comes with a free, customizable, downloadable
template to help you on your journey towards creating the perfect organizational structure for your business.

Mechanistic vs. Organic Structures

Organizational structures fall on a spectrum between mechanistic and organic.

Mechanistic structures usually look like narrow spans of control, a rigid
departmentalization, and a clear chain of command.

Oppositely, organic structures (also known as “flat” structures) are typified by Mechanistic Structure

wide spans of control, a loose departmentalization, and the chain of command,

whether long or short, can sometimes be difficult to decipher.

The mechanistic structure represents the traditional, top-down approach to

organizational structure, whereas the organic structure represents a more
collaborative, flexible approach. As you move through this section, you’ll uncover
more specific types of organizational structures, most of which fall on the more
traditional, mechanistic side of the spectrum.
Organic Structure
1. Functional Org Structure
One of the most common types of
organizational structures, this functional
structure splits up an organization based
on common job functions. For example, an
organization with a functional structure would
group all of the marketers together in one
department, group all of the salespeople
together in a separate department, and
group all of the customer service people
together in a third department.

Download the Template

Pros Cons

The functional structure allows for a high The structure also has the potential to create
degree of specialization for employees, barriers between different functions, and can
and is easily scalable should the be inefficient if the organization has a variety
organization grow. of different products or target markets.
2. Divisional:
Product-Based Org Structure
Think of a divisional organizational structure
as a structure that’s composed of multiple,
smaller functional structures (i.e. each division
within a divisional structure can have its own
marketing team, its own sales team, etc.).
Divisional, product-based organizational
structures are able to be more agile, since
each division won’t be slowed down by the
processes or setbacks of other divisions. This
allows for more employee specialization and
a team of product experts, from marketing, to
sales, to services.

Download the Template

Pros Cons

This type of structure is ideal for organizations It can be difficult to scale, and the organization
with multiple products and can help shorten may end up with duplicate resources as different
product development cycles. divisions strive for autonomy.
3. Divisional:
Market-Based Org Structure

Another variety of the divisional

organizational structure is the market-
based structure, wherein the divisions
of an organization are based around
markets, industries, or customer types.

Download the Template

Pros

The market-based structure is ideal

for an organization that has products
or services that are unique to specific
market segments, and is particularly Cons

effective if that organization has Too much autonomy can lead to divisions developing systems that are
advanced knowledge of those segments. incompatible with one another, and divisions may also end up inadvertently
duplicating activities that other divisions are already handling.
4. Divisional:
Geographical Org Structure

The geographical organizational

structure establishes its divisions based
on geography. More specifically, the
divisions of a geographical structure can
include territories, regions, or districts.

Download the Template

Pros Cons

This type of structure is best-suited It can be easy for decision making to become
to organizations that need to be near decentralized, as geographic divisions often
sources of supply and/or customers. have a great deal of autonomy.
5. Process-Based Org Structure

Process-based organizational structures

are designed around the end-to-end flow
of different processes, such as research &
development, customer acquisition, and
order fulfillment. Unlike a strictly functional
structure, a process-based structure
considers not only the activities employees
perform, but also how those different
activities interact with one another.

Download the Template

Pros Cons

This structure is ideal for improving speed Barriers between the different
and efficiency, and is best-suited to rapidly process groups can lead to problems
changing business environments, as it is communicating and handing off work.
easily adaptable.
6. Matrix Org Structure

Unlike the other structures we’ve looked

at so far, a matrix organizational structure
doesn’t follow the traditional, hierarchical
model. Instead, all employees have dual
reporting relationships.

Typically, there is a functional reporting

line as well as a product based reporting
line. When looking at a matrix structure
org chart, solid lines represent strong,
direct-reporting relationships, whereas
dotted lines indicate that the relationship is
secondary, or not as strong.

Download the Template

Pros Cons

The main appeal of the matrix structure is that it can provide both The complexity of the structure can
flexibility and more balanced decision-making, as there are two lead to confused employees.
chains of command instead of just one.
7. Circular Org Structure

While it might appear drastically different from the other

organizational structures highlighted in this section, the
circular structure still relies on hierarchy, with higher
level employees occupying the inner rings of the circle
and lower-level employees occupying the outer rings.
That being said, the leaders or executives in a circular
organization aren’t seen as sitting atop the organization,
sending directives down the chain of command. Instead,
they’re at the center of the organization, spreading their
vision outward.

Download the Template

Pros Cons

The circular structure promotes communication and From a practical perspective, the circular structure can be
the free flow of information between different parts of confusing, especially for new employees. Unlike with a more
the organization. Whereas a traditional structure shows traditional, top-down structure, with a circular structure it can
different departments or divisions as occupying individual, be difficult for employees to figure out who they report to and
semi-autonomous branches, the circular structure depicts how they’re meant to fit into the organization.
all divisions as being part of the same whole.
 CHAPTER 4

Examples of Organizational Charts

Now that you’ve seen the types of organizational charts available for you to structure your
business, here are some of our favorites being used by top organizations today.

U.S Department of Defense

KEY FEATURES

• As an incredibly large organization with

a clear hierarchy, the U.S Department of
Defense adopts a divisional structure.

• The wide span of control rightfully gives

the Secretary of Defense full control, while
decentralizing responsibility at the top of
the chain of command to the secretaries
of each branch of the military.

Source: U.S Department of Defense

Spotify

KEY FEATURES

• The chain of command is reinvented to make

employees accountable for themselves, their
squad, their tribe, and their guild.

• By restructuring their department organization,

Spotify ensures each worker is in as specialized
a team as possible.

Source: Rainforest

Twitter

KEY FEATURES

• A classic chain of command structure, with

an unbroken and clear line of authority to
the CEO.

• The formal, wide span of control given

to the CEO leads to a productive
organization with structured accountability
built right in.
Source: Twitter
Zappos

KEY FEATURES

• Zappos, well known for their customer service, adopted the “self
management” style of Holacracy, piloting the system in 2013. It is a
decentralized org structure that empowers employees to problem solve
autonomously.

• As a customer-service oriented organization, Zappos wanted all employees

to be able to contribute to the customer experience at every stage.
Holacracy is a checks and balances system that is scalable and agile.

Source: Holacracy

NASA

KEY FEATURES

• This is an agency within the federal government and includes

a helpful key delineating between associate administrators
versus administrators.

• NASA has important sub-departments like the Ames Research

Center, the Jet Propulsion Lab, and the Marshall Space Flight
Center that all report directly to the top of the organization.

Source: OrgCharting.com
Buffer

KEY FEATURES

• Buffer uses Notion to clearly outline an individual’s

Area, Sub-Area, primary manager, and additional
managers.

• This allows employees to quickly search for

members of a given team or department in a
functional, spreadsheet-adjacent org chart.
Source: Buffer

Braze

KEY FEATURES

• Braze switched from a centralized product team

to a product-based product team, opting to only
keep UX research, visual design, infrastructure,
and DevOps to centralized teams.

• By using product verticals, each individual

product team can prioritize autonomously, and
the centralized UX research and design teams can
create consistency across product look and feel.

Source: Braze
 CHAPTER 5

Structuring Your Team

In this section, we’ll be looking at how you should Keep an Eye on
structure a modern marketing team for optimal efficiency. Reporting Relationships
Before we dive in, it’s important to understand that when
When creating an organizational structure for your
it comes to organizational structure, there is no magic
organization, be sure to keep an eye on the reporting
bullet. The success of a marketing team (or a business,
relationships that you are building. These reporting
for that matter), doesn’t rest solely on the structure that
relationships, up and down the chain of command (or
underlies it.
sideways or middle-out depending on your org structure),
Poor management and decision-making can disrupt must be clear so all team members understand their
any organization, regardless of how well it’s structured. responsibilities and to whom they are accountable. If these
And while restructuring your organization might seem reporting relationships aren’t built on trust and mutual
like an appealing option for increasing efficiency, it’s understanding, tasks are susceptible to falling by the
not something to be taken lightly and can be a very wayside. Additionally, managers benefit by knowing who
difficult process. is supervising which teams, so they can delegate tasks in a

That being said, here are some best practices you can more streamlined fashion.

follow when restructuring your team.

Monitor Task Completion and
Support Accountability

The purpose of restructuring your organization is to optimize efficiency,

which is measured in the completion of tasks. Project managers should
use your organizational structure as a window into your team member’s
responsibilities and capabilities. If a task or string of tasks fails to
be completed, the project manager can follow the span of control
surrounding the task until they find the specialization responsible for
Customize your Structure
the low productivity. Regulated accountability is a main benefit of
restructuring an organization, a factor that project managers and team Once you have determined the type of
leaders should take advantage of. organizational chart with which to structure
your business, fit the chart to your team’s needs.

Be Open to Growing Across industries, companies require emphasis

on different functions of their structure. These
Growing companies are successful companies, when a flexible organizational structures are meant to help,
organizational structure has been established. As your company not negatively affect your productivity. If you
expands, your organizational structure needs to evolve with it and be find your teams to be fighting against the
multifacet enough to give each department the support it needs. This structures put in place, revisit and reorganize.
may look like expanding an executives span of control, or switching Customizing your organizational chart to fit the
your structure from centralized to decentralized to balance the needs of your employees is a priority, don’t
responsibilities of a rapidly growing organization. Growth is a good hesitate to restructure or reposition whole
thing, when you are prepared for it. departments on your chart if that is what it takes
to get the job done.
 CHAPTER 6

Building Your Remote

Organizational Structure
Remote and hybrid work is a trend that does not Why should you embrace remote work?
seem to be leaving us any time soon, so why not
embrace it? In order to dive right into the modern Because it is not going anywhere. The amount of people
workforce rather than swim against the current, who work remotely at least once per week has grown by
adapt your current organizational structure to fit 400% since 2010.
your new remote team needs.

If you are worried about what effect going

Because your employees will be delighted. 83% of workers,
remote will have on your organization and your
remote or on-site, say that a remote work opportunity would
organizational chart, there’s no reason to fear.
make them feel happier at their job.
Instead, focus that energy on preparing your
teams for the shift to remote work.

Because your company will thrive from the change. 77%

of remote employees say they’re more productive when
working from home.
How to Build a Remote-Friendly
Organizational Structure

Allow your employees the freedom to find their own routine, then
mold your org chart around them. Frequently, your remote teams will
show you how they are succeeding and will tell you when they need
help. So, before you strap your remote teams into a rigid structure,
give them the opportunity to show you how they succeed.

Embrace communication and collaboration tools. A common fear

for organizations on the brink of transitioning to remote work is that
employees will be less connected, and therefore less productive,
if they work from home. However, when you utilize the appropriate
remote work tools and create a clear chain of command, your
remote teams will thrive from the distance of their home offices.

Establish remote work structure through the

creation of a comprehensive organizational chart.
Employees who can see how their work directly
contributes to the larger goals of the company
are more inclined to produce high achieving work.
 CHAPTER 7

Conclusion
You’re now ready to hit the ground running and Get Started
create the perfect organizational structure for
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