Types of organization

Types of organization– According to Delbert Chinatown, organizations are extremely heterogeneous and diverse, whose size, characteristics, structures and objectives are different. This situation gives rise to a wide variety of types of organization that managers and entrepreneurs must know in order to have a broad overview when structuring or restructuring an organization.

With this in mind, this article includes a brief description of the main types of organization, classified according to their objectives, structure and main characteristics, in order to provide a broad, orderly and understandable overview of this important topic. It is known under the name of organization those systems that are designed to achieve certain goals or objectives in a satisfactory manner.

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They are made up of people, tasks and an administration that interact constantly according to the objectives to be met.

Organizations can be classified taking into account various criteria, some of them are the following:

According to its formality

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Formal: these organizations have official and defined systems and structures for control, decisions to be made and communication. This allows the explicit definition of how and where activities and people are separated, as well as how they are reunited. Informal: there are unofficial influential media in decision making, control and communication. Generally in an organization tend to coexist both characteristics, although one prevails over the other.

According to the degree of centralization

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Decentralized: in this types of organization the authority is delegated as much as possible along the chain of command.

Centralized: unlike the previous ones, in these organizations the decision-making authority is concentrated in the higher sector. At the lower levels very little authority is delegated to them.

According to the purposes

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Non-profit: are those organizations that do not pursue profits or profits through their activities. The objectives by which they are created have to do with playing a role or function within a given society. Here not only are the non-governmental organizations, better known as NGOs, but also the churches, public services and the army, among others.

For profit: this types of organization, also known under the name of companies, seek precisely to acquire profits or profits, for their shareholders or owners, through the activities they perform or roles they perform in a certain society.

Organizational culture

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Organizational culture, also called corporate culture, is constituted by the set of values, customs, habits and beliefs that exist in an organization. Certainly, these elements can be directed.

Culture becomes the way that each organization has to do things as a result of the interrelation of six very diverse factors: values ​​and beliefs; the internal rules; the written policies of the organization; vertical motivation, formal and informal systems and processes, and internal networks present in the organization.

As can be seen, among the mentioned factors there are some that are hardly observable and others that are expressed more explicitly in the form of documents of the organization as well as in evident behaviors.

There are companies that usually go to consultancies to request the creation of an organizational culture, as if it did not exist. In this regard it should be noted that any organization already constituted, like any structure composed of human interactions, has a culture. That is why cultures are not created, they already exist.

What can be done is to direct, guide or consciously mold the cultural development of an organization, using a series of tools. Make changes in the culture of the organization is feasible and even necessary when its involves contributing in a decisive way in the success of the objectives set by the company.

Different types of organization

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Types of Organization

As mentioned earlier, organizations are extremely heterogeneous and diverse, therefore, they give rise to a wide variety of types of organization. However, and after reviewing specialized literature in administration and business, I consider that the main types of organizations (classified according to their objectives, structure and main characteristics) are divided into:

  • Organizations according to their purposes.
  • Organizations according to their formality.
  • Organizations according to their degree of centralization.

Organizations According to Your Purposes :

That is, according to the main reason they have to carry out their activities. These are divided into:

For-profit organizations: Calling companies, have as one of their main purposes (if not the only one) generate a certain profit or utility for their owner (s) and / or shareholders.

Non-profit organizations: They are characterized by having as purpose to fulfill a certain role or function in society without claiming a profit or utility for it.

The army, the Church, public services, philanthropic entities, non-governmental organizations (NGOs), etc. They are examples of this type of organizations.

Organizations According to their Formality

In other words, according to whether or not they have official and defined structures and systems for decision making, communication and control. These are divided into:

Formal Organizations

This type of organization is characterized by  having official and defined structures and systems for decision making, communication and control. The use of such mechanisms makes it possible to define explicitly where and how people and activities are separated and how they meet again.

According to Alberto Chinatown,  formal organization  includes organizational structure, guidelines, norms and regulations of the organization, routines and procedures, in short, all the aspects that express how the organization intends to be the relations between the organs, positions and occupants, with the purpose of which its objectives are reached and its internal balance is maintained.

This type of (formal) organizations can, in turn, have one or more of the following types of organization:

Linear Organization:  Constitutes the simplest and oldest structural form, because it has its origin in the organization of ancient armies and the ecclesiastical organization of medieval times. The name linear organization means that there are direct and unique lines of authority and responsibility between superior and subordinates. Hence its pyramidal format. Each manager receives and transmits everything that happens in his area of ​​competence, since the lines of communication are strictly established. It is a form of organization typical of small businesses or early stages of organizations.

Functional Organization:  It is the type of organizational structure that applies the functional principle or principle of specialization of functions. Many organizations of antiquity used the functional principle for the differentiation of activities or functions. The functional principle separates, distinguishes and specializes: It is the germ of the staff .

Line-Staff Organization:  The type of line-staff organization is the result of the combination of the types of linear and functional organization, seeking to increase the advantages of those two types of organization and reduce their disadvantages. In the line-staff organization, there are characteristics of the linear type and the functional type, gathered to provide a more complex and complete organizational type. In the lineal-staff organization, line bodies (executing bodies) and advisory bodies (support and consulting bodies) coexist, maintaining relations with each other. The line organs are characterized by linear authority and by the scalar principle, while the staff organs provide advice and specialized services.

They receive a variety of denominations: committees, boards, councils, working groups, etc. There Committees:  is no uniformity of criteria regarding its nature and content. Some committees perform administrative functions, others, technical functions; others study problems and others only give recommendations. The authority given to the committees is so varied that there is considerable confusion about its nature.

Informal organizations

This type of organization consists of unofficial means but that influence in the communication, the decision making and the control that are part of the habitual way of doing things in an organization.

According to Mitt, Black and Porter, although practically all organizations have a certain level of formalization, also all organizations, even the most formal, have a certain degree of informalisation.

Organizations According to their Degree of Centralization

That is, according to the extent to which the authority is delegated. They are divided into:

Centralized Organizations : In a centralized organization, the authority is concentrated in the upper part and there is little authority, in decision-making, that is delegated to the lower levels.

Many government agencies are centralized, such as armies, the postal service and the mystery of finance.

Decentralized Organizations: In a decentralized organization, the decision-making authority is delegated in the chain of command as far as possible. Decentralization is characteristic of organizations that function in complex and unpredictable environments. Companies that face intense competition tend to decentralize to improve responsiveness and creativity. At this point, and to complement the above, it should be noted that according to Mitt, Black and Porter, students often perceive that formalization and centralization are essentially the same, and therefore, they believe informational and decentralization as synonyms. However, this is not the case. You can have a very formal organization that is highly centralized, although also a formal organization that is quite decentralized. On the other hand, there would also be a highly informal organization that is decentralized or highly centralized.


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Organizations must have nine principles that relate to each other and provide the pattern for an efficient organization and are:

 Hierarchy: the organization must have centers of authority from which the necessary communication flows to achieve the objectives.

Objective: all activities must relate to the objectives and purpose of the company.

Specialization: each member of the organization must do a single activity, to have more efficiency and skill in their work.

Parity of authority and responsibility: each degree of responsibility must correspond to the degree of authority necessary to fulfill this responsibility.

Dissemination:  the duties of each position that cover authority and responsibility must be published and made available to everyone.

Amplitude or stretch of control:  superiors must not exercise authority over more than five subordinates.

Coordination: all units of an organization must be kept in balance.

Continuity:  once the organizational structure is established, it must be maintained, improved and adjusted to environmental conditions.

Command Unit: a single boss and subordinates shall not report to more than one superior.

Finally, types of organization to a coordinated system of activities, which through teamwork and directed objectives aims to meet the objectives set forth by its managers, whether monetary or not. Organizations today are characterized because they have official rules, a certain degree of formalization, as well as the adoption of an organizational culture and respect for order above all. All this in order to create a favorable image that promotes the values ​​and assets of the company.

Roger Walker

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