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Types of Organizational Structures

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Hierarchical Structure

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Advantages: Clear chain of command, easy-to-understand structure, specialization within departments. Disadvantages: Can be bureaucratic, slower decision-making, risk of low employee morale due to perceived distance from upper management.

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Flat (or Horizontal) Structure

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Advantages: Faster decision-making, high employee morale due to closeness to decision-makers, fosters open communication and collaboration. Disadvantages: Can lead to role confusion, potentially unsustainable as the organization grows, may place heavy demands on leadership.

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Matrix Structure

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Advantages: Flexible and dynamic, optimal use of resources, encourages cooperation across different functions. Disadvantages: Complexity can cause confusion, potential for conflict between two managers, challenges in balancing time and resources across projects.

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Network Structure

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Advantages: Highly flexible and adaptable, cost savings due to outsourced operations, access to a wide pool of talent. Disadvantages: Lack of control over outsourced functions, can lead to cultural and communication challenges, potential for a fragmented organizational identity.

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Divisional Structure

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Advantages: Focus on specific markets or products, allows for fast response and decision-making within divisions, easy to scale new products or markets. Disadvantages: Potential for siloing and inter-divisional competition, duplication of resources across divisions, challenges in coordinating between different divisions.

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