Matrix departmentation is a hybrid type of departmentation and is used when a company needs to complete a project which demands close, integrated work between people from various departments. An example is if a company is developing a new fighter aircraft--a project manager would be in charge of a semi-permanent department consisting of people from engineering, research, finance, etc.. It is commonly believed that applying classical principles of management results in either bureaucratic or mechanistic organizations. The Classical management theory can result in either a bureaucratic or mechanistic organization. Both are based on rational-legal authority and have a strict structure dominated by rules and policies. They are rigid and inflexible, but suitable for a stable, predictable environment. In contrast to bureaucratic or mechanistic organizations, organic organizations are more informal, there is less rigid specialization, and there is a greater focus on personal relationships . This describes organic organizations--they are supposed to be flexible and well-suited for a rapidly changing environment; i.e. computer software development. A matrix structure is a structure that creates dual lines of authority and combines functional and product departmentalization. The most obvious structural characteristic of the matrix is that it breaks the unity-of-command concept. Employees in the matrix have two bosses—their functional department managers and their product managers. Therefore, the matrix has a dual chain of command. A strength of the matrix lies in its ability to facilitate coordination when the organization has a multiplicity of complex and interdependent activities. A major disadvantage of the matrix lies in the confusion it creates, its potential to foster power struggles, and the stress it places on individuals. An organic type of organization is relatively informal--it does not have a strict authority hierarchy. An organic type of organization is structured to encourage flexibility and change and is typified by decentralized decision-making. Team structure is the use of teams as the central device to coordinate work activities. The primary characteristics of the team structure are that it breaks down departmental barriers and decentralizes decision making to the level of the work team. Team structures also require employees to be generalists and well as specialists. In smaller companies, the team structure can define the entire organization. For instance, Imedia, a 30-person marketing firm in New Jersey, is organized completely around teams that have full responsibility for most operational issues and client services.
A virtual organization is a small, core organization that outsources major business functions. In structural terms, the virtual organization is highly centralized, with little or no departmentalization. Virtual organizations have created networks of relationships that allow them to contract out manufacturing, distribution, marketing, or any other business function where management feels others can do it better or cheaper. The major advantage of this structure is its flexibility. For instance, it
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