What does the Organization Mean? For entrepreneurial productive activities, organizes various factors of production such as land, labor, capital, machinery, etc. for channeling. Eventually, the product reaches consumers through different agencies. Business activities are divided into different functions, these tasks are assigned to different individuals. So, what are we going to discuss; The different types of Organization and their Meaning with Merits and Demerits.

If there are different types of Organizations in different departments, their Merits and Demerits will also be there, and together with their meanings.

There should be the achievement of common business goals with various personal endeavors. An organizational organization has a structural framework of the duties and responsibilities required for personnel in carrying out various tasks with the approach of achieving business goals. The management attempts to combine various business activities to meet pre-determined goals. Definition: “The organization is the process of identifying and formulating the process of establishing relationships with the purpose of executing, defining and delegating and fulfilling objectives, to work the most effective way of working people.” In Alan’s words, an organization is a tool to achieve organizational goals. The work of each person is defined and the authority and responsibility are decided to fulfill it.

Different types of Organizations:

  • Project organization
  • Functional organization
  • Matrix organization
  • Line organization, and
  • Line and staff organization

Project Organization:

Meaning of the project organization: Project organization consists of several horizontal organizational units to complete long-term projects. Each project is extremely important for the organization. Therefore, a team of experts has been formed from different areas for each project. The size of the project team varies from project to project. The activities of the project team are coordinated by the project manager, who has the right to seek advice and assistance of experts within and outside the organization.

The main concept of the project organization is to gather a team of experts to work on and complete a specific project. Project employee is different and independent of functional departments. The project organization is employed in professional areas such as aerospace, construction, aircraft manufacturing and management consulting etc.

Qualifications and Merits of the project organization:
  • It focuses on the demand for a complex project.
  • It completes the completion of the organization without disturbing the normal routine of any organization.
  • It provides a logical point of view for any challenge in completing a major project with a definite start, end, and clearly defined result.
Project organization Demerits or faults:
  • Organizational uncertainty is because a project manager has to deal with professionals from different fields.
  • There can be inter-departmental conflicts with organizational uncertainties.
  • There is a great fear among the personnel that the completion of the project can lead to job loss. This sense of insecurity can cause great anxiety about career progression.

Functional Organization:

Functional organization means: In this type of organization, the number of experts each organization has near a particular task or group of related organizations. Every expert has control over the function under his charge, it does not matter where this ceremony is done in the organization. He controls all those working in that functional area.

For example, a Human Resources Department will recruit, train and develop the necessary people for all other departments of the organization. Each employee receives orders and is responsible for many experts. The functional organization can also be used at a higher level at the lower level of management. At the higher level, it involves the group of all functions to be included in the main functional departments and keeping each department under an expert executive. Each functional issues the order in the whole organization in relation to the tasks in the main question.

Qualifications and merits of functional organization:
  • There is a full specialization of work and each worker gets expert guidance from many experts.
  • Work is done more effectively because each manager is responsible for one task rather than the abundance of tasks.
  • The growth and expansion of the enterprise are not limited to the capabilities of some line managers.
The fault or Demerits of functional organization:
  • It violates the principle of unity of the command because a person receives orders from many experts. It leads to conflict and poor discipline.
  • Responsibility is divided. It is not possible to decide the responsibilities of specific individuals.
  • There is a delay in decision-making. Decision problems cannot be taken quickly to include many experts because all functional managers need consultation.

Matrix Organization:

Meaning of Matrix Organization: The matrix organization or grid organization has a hybrid structure with the combination of the functional department of two complementary structures with the net project structure. Functional structure matrix is the permanent feature of the organization and retains the authorization for the overall operation of the functional units.

The matrix organization has been developed to meet the needs of a large and complex organization, for which it is necessary to make the structure more flexible and technically oriented rather than structural structures. Temporary project teams are consistent with successful completion of special projects. The right of the project manager flows horizontally while the functional manager’s right flows vertically.

Properties or Merits of Matrix Organization:
  • It helps individually focus on focus, talent, and resources on a single project which provides better planning and control.
  • It provides an environment in which professionals can test their abilities and make the most contribution.
  • This project gives motivation to the employees because they can focus directly on the completion of a particular project.
Matrix organization Demerits or faults:
  • It violates the principle of unity of order. Each employee has two senior executives- one functional superior and other projects are better.
  • The scalar theory is also violated because there is no fixed hierarchy.
  • Organizational relations here are more complex. In addition to formal relationships, informants also arise which cause problems of coordination.

Line Organization:

Meaning of Line Organization: This is the basic framework for the entire organization. It represents a direct vertical relationship through which the authority flows. This is the simplest and oldest form of internal organization. This organization is also known as the Scalar organization. Authorization flows from top to lower level. Every person is in charge of all the persons under him and he himself is responsible for his superiority.

All persons responsible for the execution of the authority flows through vertical and top persons. On the other hand, liability flows upwards. Everyone is responsible for their work and is responsible for their senior. Since authority and responsibility flows in a straightforward straight line, it is called line organization. This form of organization is followed in military establishments.

Line organization qualifications and merits:
  • It is easy to set up and easy to understand by employees. There is no complexity in this organization because every person is responsible for only one superior.
  • Line organization helps in fixing the rights and responsibilities of each person in the organization. The authority is given in the context of the assignment of the work.
  • Since only one person is in charge of division or division, the decisions are early. The unity of command theory is followed.
Line organization’s demand and Demerits:
  • There is a lack of coordination between different departments.
  • The final authority to take all the decisions is with the officers. The flow of information is downwards.
  • Business is dependent on some key individuals and the sudden disappearance of such persons from the scene can lead to instability.

Line and Staff Organization:

Meaning of Line and Staff Organization: Because of the underlying lack of line organization and functional organization, they are rarely used in pure forms. Line organization is very focused and the functional organization is very much spread. New Organization Structure Line and Staff Organization have been developed to eliminate the shortage of both types of organizations.

Properties or Merits of Line and Staff Organization:
  • Have a schematic specialization. And, there is a well-defined authority and responsibility. The line of command is maintained.
  • Ideal and executive functioning is the division.
  • Employees with their expert knowledge provide opportunities for line officers to adopt a rational multi-dimensional approach to a problem.
  • This type of organization nurtures growth because each person grows in their own characteristics. It also helps coordinate through co-operation and leadership.
Drawbacks or Demerits of Line and Staff Organization:
  • On occasions, lines and employees may vary. It can be from the conflict of interest and inhibit harmony relations.
  • Incompetent line officers have a misinterpretation of expert advice.
  • Employees feel less without conditions of authority.
  • Employees become ineffective in the absence of authority.
The different types of Organization and their Meaning with Merits and Demerits
The different types of Organization and their Meaning with Merits and Demerits. Image credit fro #Pixabay.

Concepts of Organization:

There are two concepts of organization:

Static Concept:

Under the static concept, the term ‘organisation’ is used as a structure, an entity or a network of specified relationship. In this sense, an organization is a group of people bound together in a formal relationship to achieve common objectives. It lays emphasis on position and not on individuals.

Dynamic Concept:

Under the dynamic concept, the term ‘organisation’ is used as a process of an on-going activity. In this sense, an organization is a process of organizing work, people and the systems. It is concerned with the process of determining activities which may be necessary for achieving an objective and arranging them in suitable groups so as to be assigned to individuals. It considers the organization as an open adoptive system and not as a closed system. Dynamic concept lays emphasis on individuals and considers the organization as a continuous process.


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