Types of Organizations
As mentioned earlier, organizations are extremely heterogeneous and diverse, thus giving rise to a wide variety of types of organizations. However, after reviewing literature on business and management, consider that the main types of organizations, classified according to their objectives, structure and main features are split into: 1) organized according to their purposes, 2) formality and organizations by 3) organizations according to their degree of centralization.
• Organizations to their ends .- That is, as the main reason they have for their activities. These are divided into:
1. For-profit organizations: Calling businesses, have as one of its main purposes (if not only) to generate a particular profit or gain for (s) owner (s) and / or shareholders.
2. Nonprofit organizations: They are characterized by the purposes of satisfying a particular role or function in society without trying to gain or profit by it.
The army, the Church, public services, charities, non-governmental organizations (NGOs), etc. Examples of such organizations.
• According to Formality Organizations .- In other words, depending on whether or not formal systems and structures defined for decision-making, communication and control. These are divided into:
1. Formal Organizations: These organizations are characterized by formal systems and structures defined for decision-making, communication and control. The use of such mechanisms makes it possible to define explicitly where and how to separate people and activities and how they meet again.
According Idalberto Chiavenato, formal organization includes organizational structure, guidelines, rules and regulations of the organization, routines and procedures, in short, all the aspects that express how the organization intends to be the relationship between the organs, and occupying positions with order that its objectives are achieved and its internal balance is maintained.
This type of (formal) may in turn have one or more of the following types of organization:
- Linear Organization: It is structurally the simplest and oldest, it has its origin in the organization of the old army and the ecclesiastical organization of the medieval times. Linear organization’s name means that there are direct lines of authority and responsibility only superior and subordinates. Hence its pyramidal form. Each manager receives and transmits everything that happens in their area of competence, as the lines of communication are strictly established. It is a form of organization typical of small companies or organizations early
- Functional Organization: This is the kind of organizational structure that applies the principle or principle of functional specialization of functions. Many organizations of old used the functional principle for the differentiation of activities or functions. The functional principle separated, distinguished and specialized: The germ of staff
- Line-Staff Organization: The type of line-staff organization is the result of the combination of types of linear and functional organization, seeking to increase the benefits of these two types of organization and reduce their handicaps. In the line-staff organization, there are linear features and functional, assembled to provide a more complex organizational type and complete. In the line-staff organization coexist line agencies (implementing agencies) and consulting (support bodies and consultancy) to maintain relations with each other. Line organs are characterized by the authority and the principle linear scale, while staff bodies providing advice and services.
- Committees: They receive a variety of denominations: committees, boards, councils, working groups, etc. There is no uniformity of criteria regarding the nature and content. Some committees perform administrative functions, other, technical functions, others study and other problems are only recommendations. The authority given to committees is so varied that much confusion reigns about its nature.
2. Informal Organizations: This type of media organizations is unofficial but that affect communication, decision making and control are part of the normal way of doing things in an organization.
According to Hitt, Black and Porter, although almost all organizations have some level of formalization, also all organizations, even the most formal, have a certain degree of informality.
• Organizations according to their degree of centralization .- That is, as far as authority is delegated. They are divided into:
1. Centralized organizations: In a centralized organization, authority is concentrated in the top and there is little authority in making decisions that are delegated to lower levels. Many government agencies are centralized, as hosts, the postal service and the mystery of finance.
2. Decentralized Organizations: In a decentralized organization, the decision-making authority is delegated to the chain of command as far as possible. Decentralization is characteristic of organizations that operate in complex and unpredictable. Companies often face intense competition decentralization to improve responsiveness and creativity.
At this point, way to supplement the above, it should be noted that according to Hitt, Black and Porter, often students perceive that formalization and centralization are essentially the same, and therefore create informality and decentralization as synonyms. However, this is not the case. You can have a very formal organization that is highly centralized, although a formal organization is very decentralized. On the other hand, it would be a highly informal organization that is decentralized or highly centralized.
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