In this video, learn about various types of organizational structures and business functions.
- Great businesses depend on creative people with innovative ideas to help them remain competitive. Having a platform to communicate those ideas and the support to implement them starts with understanding the organization's structure and knowing who can help make things happen. Let's explore some of the options for organizational structures. Traditional structures are functional, divisional, matrix, and hybrid. A functional structure separates the organization into different departments.
In this type of organization, you may hear employees say Contact the Accounting Department to process that invoice or I believe we need to get Research and Development involved before we launch the Marketing Campaign. In other words, the reporting structure is delineated by department, where a Sales Manager may report to a Sales Director who then reports to the Vice President of Sales. A divisional structure divides the organization by product lines or geographic regions. In this type of company, you may hear an employee say If you got an idea about a new flavor for the diet drinks, you should tell someone in the Beverage Division.
A matrix structure combines divisional and functional. There are multiple chains of command where employees report to multiple managers. Sometimes, matrix structures are temporary and exist solely for project based work. For example, for one project, several different positions may temporarily report to the Project Director, but still maintain their traditional reporting relationships with their regular managers. Finally, a hybrid structure can be a blend of any of the other structures.
To explore this topic more, check out the Exercise File named Organizational Structures. Organizational structures exist to enhance communication and to make clear to all stakeholders who makes what decisions within the organization. HR Professionals also need to understand the other functions that exist in the business. The core business functions are finance, accounting, marketing, sales, operations, research and development, and information technology.
The finance function handles strategic financial plannings, such as the company's investment portfolio. The accounting function oversees the day-to-day cash flow and bookkeeping of the organization. Marketing conducts research to get a good understanding of where to place products and services the business sells. Sales uses the materials marketing creates to convince buyers to purchase products and services from the organization. Operations ensures the day-to-day of the business continues to run smoothly, including managing the supply chain.
Research and development creates new products or services in response to or in anticipation of consumer needs. Finally, in an interconnected global economy, information technology plays a critical role by ensuring that the business is connected to each other and their customers through the use of programs, apps, collaborative systems, and ecommerce platforms. To learn more about the primary responsibilities of each core business function, take a moment and review the Exercise File Core Business Functions.
The PHR Exam explores your understanding of how HR interrelates with other core business functions and within diverse business structures. This knowledge is foundational to the practice of Human Resources.
- Modeling ethical standards
- Managing legal risks
- Finding and interviewing candidates
- Designing training and measuring its effectiveness
- Designing total rewards
- Promoting diversity and inclusion
- Employee engagement strategies
- Managing complaints and grievances
- Implementing workplace programs