Organizational Structure Types

Why This Matters

When business anthropologists study organizations, they're not just mapping reporting lines on an org chart—they're uncovering how power flows, how culture reproduces itself, and how human relationships get formalized into systems. Organizational structures are essentially codified social arrangements, and understanding them reveals why some companies innovate rapidly while others stagnate, why certain voices get heard while others are silenced, and how organizations adapt (or fail to adapt) to environmental pressures. You're being tested on your ability to see structure as a cultural artifact that shapes behavior, identity, and meaning-making within business contexts.

The structures covered here demonstrate core anthropological concepts: hierarchy and egalitarianism, centralization versus distribution of authority, boundary-making and boundary-crossing, and formal versus informal organization. Don't just memorize which structure has how many management levels—know what each structure reveals about an organization's assumptions regarding human nature, coordination, and control. When you encounter these on exams, think like an ethnographer: what would it feel like to work here, and what cultural logics make this arrangement seem "natural" to insiders?

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Hierarchy and Control-Centered Structures

These structures prioritize clear authority, predictability, and vertical power distribution. Anthropologically, they reflect cultural assumptions that coordination requires centralized control and that expertise should be compartmentalized. These are the structures most aligned with bureaucratic rationality and Weberian ideals of organizational efficiency.

Hierarchical Structure

• Clear chain of command with multiple management layers—establishes who holds authority and how decisions flow downward through the organization
• Defined roles and responsibilities create predictable social positions, reinforcing status distinctions and formal power relationships
• Promotes stability but inhibits innovation—bureaucratic layers slow decision-making and can suppress emergent ideas from lower-status positions

Functional Structure

• Groups employees by specialized expertise (marketing, finance, HR)—creates distinct occupational subcultures with their own languages, values, and norms
• Operational efficiency within departments comes from deep specialization, but this same logic produces departmental silos
• Clear authority within functions but weak lateral connections—anthropologists note this often creates tribal boundaries that impede organizational learning

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Flexibility and Adaptation-Centered Structures

These structures prioritize responsiveness, decentralized decision-making, and horizontal relationships. They reflect cultural assumptions that organizations must adapt quickly and that front-line workers often possess critical knowledge. These structures challenge traditional authority but create new coordination challenges.

Flat Structure

• Minimal management layers create a horizontal organization—reduces social distance between leadership and employees
• Employee empowerment and faster decisions result from distributed authority, reflecting egalitarian cultural values
• Role ambiguity emerges as a trade-off—without clear hierarchy, informal power dynamics and emergent leadership become critical to study

Team-Based Structure

• Cross-functional teams organized around projects or goals—deliberately breaks down the silos created by functional structures
• Shared responsibility promotes collaboration but requires strong group identity formation to function effectively
• Conflicts arise when roles are unclear—anthropologists observe that team-based structures often develop their own micro-cultures and status systems

Divisional Structure

• Semi-autonomous units organized by product, service, or geography—each division develops its own cultural identity and practices
• Flexibility and market responsiveness come from decentralized decision-making closer to customers
• Resource duplication across divisions is the efficiency trade-off—organizations essentially run multiple parallel cultures

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Hybrid and Boundary-Spanning Structures

These structures attempt to combine benefits from different organizational logics, creating complex arrangements that cross traditional boundaries. They represent organizational attempts to resolve fundamental tensions between specialization and integration, stability and flexibility.

Matrix Structure

• Dual reporting relationships combine functional expertise with project/product focus—employees navigate multiple authority systems simultaneously
• Facilitates cross-departmental collaboration by formally legitimizing boundary-crossing relationships
• Power struggles and confusion are endemic—anthropologists study how individuals manage competing loyalties and negotiate conflicting demands

Project-Based Structure

• Temporary teams form around specific projects—creates liminal organizational spaces that exist outside normal structures
• Focused resources and expertise enable innovation, but team members often maintain ties to permanent "home" departments
• Post-project challenges include resource reallocation and loss of team cohesion—what anthropologists call the dissolution of temporary communities

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Distributed and Networked Structures

These structures extend organizational boundaries beyond traditional employment relationships, relying on external partnerships and digital connectivity. They challenge anthropological assumptions about where "the organization" begins and ends, raising questions about identity, loyalty, and cultural coherence.

Network Structure

• Central organization outsources functions to external partners—creates inter-organizational relationships that blur firm boundaries
• Flexibility and scalability come from accessing external expertise without permanent commitments
• Coordination challenges require strong communication across organizational cultures—anthropologists study how trust and shared meaning develop across network ties

Virtual Structure

• Digital communication and remote collaboration replace physical co-presence—fundamentally changes how organizational culture forms and transmits
• Global talent access offers diversity benefits but requires managing across time zones, languages, and national cultures
• Isolation and weak ties can undermine the informal relationships that ethnographers identify as critical to organizational functioning

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Authority Distribution Experiments

These structures represent radical reimagining of how authority and decision-making can be organized, often explicitly rejecting traditional hierarchical assumptions. They provide natural experiments in alternative social organization that anthropologists find particularly revealing.

Holacracy

• Authority distributed across self-organizing teams—replaces traditional management with role-based governance systems
• Roles over job titles allows fluid responsibility allocation—challenges Western assumptions about fixed occupational identities
• Implementation resistance reveals how deeply hierarchical thinking is embedded in organizational culture—even "flat" organizations often recreate informal hierarchies

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Quick Reference Table

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Self-Check Questions

1. Which two structures both create dual reporting relationships, and what distinguishes how long these arrangements typically last?

2. A business anthropologist observes that employees in different departments have developed distinct vocabularies, dress codes, and assumptions about "good work." Which structure most likely produced these occupational subcultures, and why?

3. Compare and contrast how flat structures and holacracy approach the reduction of hierarchy—what governance mechanisms does holacracy provide that flat structures typically lack?

4. If an FRQ asks you to analyze why an organization struggles to share knowledge across units, which two structures would provide the strongest examples of structural barriers to collaboration, and what specific features create these barriers?

5. An anthropologist studying a network structure organization notes that employees struggle to articulate "who we are" as a company. Using concepts of organizational culture and boundary-making, explain why this identity confusion emerges in network structures but not in functional structures.