Understanding Organizational Structure: Formal and Informal Relations
Understanding Organizational Structure
We can broadly define two types of relationships within an organizational structure:
1. Formal Relations
Formal relations are those that management has previously advocated and communicated to other members of the organization. For example, an integrated formal relationship in the formal organization of a company is maintained by the department head with the different departments. A weekly status meeting between the chief accountant and director to review economic and financial costs has a formal character, falling under the formal organization of the company.
Formal relationships can be of several types:
- Linear: Relations of authority or hierarchy between boss and subordinate.
- Staff: Advisory relationships between specialists and directors.
2. Informal Relations
Informal relationships arise spontaneously as a result of interpersonal communications among people within the company. For example, an informal relationship built into the informal organization of the company could be one between the head of Human Resources and the department head, assuming they play tennis together on Sundays. The relationship between the director’s secretary and the department head could be an informal relationship based on personal issues such as friendship or marriage, therefore being part of the informal organization.
Organizational Forms
An organizational chart is a graphical representation of the organizational structure of a company or any other organization. It reflects the levels and areas that make up the company, as well as the hierarchical and functional relations between them. The organization is represented as a set of geometric shapes linked together through a series of lines.
Support Structure
The support structure is formed by the counseling staff, whose role is to advise managers on different issues: fiscal, labor, commercial, legal. This support structure is also called the staff organ and can be of two types:
- Staff Management: Consisting of specialists, who are often part of the company’s staff and central to the company’s objectives.
- Support Staff: Consisting of unincorporated enterprise advisers, since their functions often have a complementary character. For example, a tax advisor.
Technostructure
The technostructure is formed by the analysts or experts who study the various business functions in order to find their strengths and weaknesses, strengthening the former and improving the latter. We can talk about three types of analysts:
- Analysts who normalize methods and times that work processes.
- The planning and control analysts: accountants and auditors to normalize results.
- Analysts personal coaches and trainers to normalize skills and behaviors. For example, an auditor.
Management Levels
- Senior Management: Example: The CEO of the company and senior management.
- Middle Management: Example: The director of human resources.
- Operational Basis: Example: A production operator or administrator.