Types of Companies and Organizational Structures

Posted on Mar 22, 2025 in Business Administration and Management (BAM)

A company is a for-profit entity, the primary purpose of which is to obtain benefits through the sale of goods or services on the market. Components of the concept of an organization include:

  • Assets (property, rights, obligations)
  • Value of intangible assets (image, customers)
  • Work (employer, employees)

Company = Organization. Goodwill = Intangible value of a company.

Legal Classification of Companies

Companies can be broadly classified as public and private.

  • Private Companies: These include individual companies and corporate companies (owned by several people).

Classification According to Partners’ Liability

  1. Limited Liability Companies (e.g., SA, SRL, S. Cooperativa): Partners’ liability is limited to their investment.
  2. Companies with Unlimited Liability: Partners are responsible with their personal assets (e.g., S. Colectiva, S. Civil, Comunidad de Bienes).
  3. Limited Partnership (S. Comanditaria): General partners respond with their assets, but community partners do not.

Classification According to Minimum Capital Requirement

  1. Companies in which a minimum capital is required (e.g., SA, SL).
  2. Companies with no minimum capital requirement (other companies).

Classification Based on Social Economy Goals

  1. Companies that, apart from obtaining benefits, aim at integration with the environment and social cohesion (e.g., Cooperativas, S. Laborales).
  2. Companies that only seek profit (other companies).

Classification in the Commercial Code

  1. Market companies (S. Colectiva, S. Comanditaria, SA, SRL): Companies whose activities are commercial.
  2. Non-market companies (other companies).

Types of Organization by Organizational Structure

Organizational structure is the distribution of the parts of an organization. Organizations use this means to achieve the goals they have set.

Classification According to Task Assignment and Coordination

  1. Formal: Each element is located, identified, and performs its function, obeying orders from other clearly identified individuals.
  2. Informal: Spontaneity – its members engage in relations that were not previously defined.

Classification According to the Role of Decision-Making Authority

  1. Centralized: The decision-making authority occupies the top position in the corporate hierarchy. The possibility of delegating tasks to lower positions is minimal.
  2. Decentralized: The authority assigns decision-making to individuals in lower positions.

Classification Depending on the Degree of Specialization of Job Positions

  1. Simple:
    • a) Linear Organization: Principle of hierarchy – each employee receives orders from their immediate superior.
    • b) Functional Organization: Subordinates at lower levels receive orders from several heads of department instead of receiving them from only one head.
  2. Complex:
    • a) Mixed or Hierarchical Functional Organization: Heads with authority make their decisions upon the previous advice from specialists (staff).
    • b) Organization in Committees: Decisions are made, and responsibility is taken as a group, not individually.
    • c) Matrix Organization: Double-entry matrix. One entry would be the function, and the other would be the project. There are two heads: a head linked to functions and a project head.

Classification Depending on the Degree of Hierarchy

  1. Highly Hierarchical: There is a large number of hierarchical levels and thus a big gap between staff and managers.
  2. Flat: Virtual absence of intermediate levels of command between management and staff.