What one type of an organizational structure exists where an employee would most likely be found to be directly reporting to two bosses?

An organizational structure defines how activities such as task allocation, coordination and supervision are directed toward the achievement of organizational aims. It can also be considered as the viewing glass or perspective through which individuals see their organization and its environment.

While flatarchies are which are much less complex, the traditional hierarchy system can be played to the advantage of the management when they don't want to be open about reporting structures.

Can organisational structures lie?

Here are two cases:

Lucy doesn't know about Charlotte

Take this friend of mine who was asked to join as head of a department. Lets call her Charlotte. On joining she found that one of the people in the department who was much older than her with more experience. Lets call her Lucy. She had been told by the management that Charlotte was joining at the same level as her. Imagine Lucy's surprise when she received her first email from Charlotte asking for a meeting of the department and how she would like to organise the department in the future. Naturally Lucy's back goes up because she wasn't really expecting a boss, much less someone younger than her. So now she is trying to discredit her as much as she can and as subtly as she can with other colleagues.

What about the organisational chart? There doesn't exist one yet. But if the company has to go by what they told Charlotte when she took the job, there is straight line reporting relationship between Lucy and Charlotte. If management want to cheat however, they could have a dotted line between Lucy and one of the partners of the firm. But that would displease Charlotte.

Typically these situations arise because the management is not being frank with people and doesn't have the courage to take a strong stand.

Tom has discovered that his CFO reports to the owner of the business

Tom is CEO of a family owned business. When he was recruited he was told that the owners want to slowly pull out from the day to day and leave the business to a professional CEO. Tom has been going about his work very diligently but has decided to recruit a senior CFO for the business. As a courtesy he makes the owner also interview the CFO whose name is Chris. One day after a little disagreement Chris tells Tom that he is also reporting to the owner of the business and that he has an OK from the owner on the course of action he wants to follow. Tom is surprised that Chris is even in touch with the owner. Chris says he was told at the interview that he has a dotted line relationship with the owner. Unfortunately this discovery happens when Tom and Chris have a had a little disagreement over how to run the finances of the company.

Dotted Line Reporting

What are solid line reporting and dotted line reporting in a matrix organization structure? The definition of a matrix organization structure is where people report formally to more than one manager.

These reporting lines can take the form of what is known as a solid line or a dotted line reporting relationship. The weight of the line is meant to represent the level of power and influence of the different managers.

If you are sitting in a job interview and hear the words 'dotted line reporting' you have just encountered the world of matrix management. ( Consider yourself lucky that you heard about the dotted line reporting at the interview. Some employers tell you about the dotted line after you have joined ). In this typical organizational structure, you can have two bosses: a 'straight-line' direct boss, who is the person who prepares your performance review and decides on your raise; and a 'dotted-line' boss, who may also assign you work but has less control over your review. It is easy to see how difficult a job could be if your two bosses aren’t in agreement about your work or your abilities.

If you are able to balance more than one manager, it is a big career plus to work for a matrix organization. But give it some serious thought. I was miserable reporting to two managers, so make haste slowly. If your managers are not aligned there is always hell to pay.

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But not every company functions best with a hierarchical organizational structure. Many types of organizational charts exist because many types of organizational structures exist. 

Let’s go through the seven common types of org structures and reasons why you might consider each of them.

1. Hierarchical org structure

The pyramid-shaped organizational chart we referred to earlier is known as a hierarchical org chart. It’s the most common type of organizational structure—the chain of command goes from the top (e.g., the CEO or manager) down (e.g., entry-level and low-level employees), and each employee has a supervisor. 

Pros    

• Better defines levels of authority and responsibility

• Shows who each person reports to or who to talk to about specific projects

• Motivates employees with clear career paths and chances for promotion     

• Gives each employee a specialty     

• Creates camaraderie between employees within the same department

Cons

• Can slow down innovation or important changes due to increased bureaucracy

• Can cause employees to act in interest of the department instead of the company as a whole

• Can make lower-level employees feel like they have less ownership and can’t express their ideas for the company

2. Functional org structure

Similar to a hierarchical organizational structure, a functional org structure starts with positions with the highest levels of responsibility at the top and goes down from there. Primarily, though, employees are organized according to their specific skills and their corresponding function in the company. Each separate department is managed independently. 

Pros

• Allows employees to focus on their role

• Encourages specialization

• Help teams and departments feel self-determined

• Is easily scalable in any sized company

Cons

• Can create silos within an organization

• Hampers interdepartmental communication

• Obscures processes and strategies for different markets or products in a company

3. Horizontal or flat org structure

A horizontal or flat organizational structure fits companies with few levels between upper management and staff-level employees. Many start-up businesses use a horizontal org structure before they grow large enough to build out different departments, but some organizations maintain this structure since it encourages less supervision and more involvement from all employees.

Pros    

• Gives employees more responsibility

• Fosters more open communication    

• Improves coordination and speed of implementing new ideas    

Cons

• Can create confusion since employees do not have a clear supervisor to report to

• Can produce employees with more generalized skills and knowledge

• Can be difficult to maintain once the company grows beyond start-up status

In divisional organizational structures, a company’s divisions have control over their own resources, essentially operating like their own company within the larger organization. Each division can have its own marketing team, sales team, IT team, etc. This structure works well for large companies as it empowers the various divisions to make decisions without everyone having to report to just a few executives. 

Depending on your organization’s focus, there are a few variations to consider.

Market-based divisional org structure

Divisions are separated by market, industry, or customer type. A large consumer goods company, like Target or Walmart, might separate its durable goods (clothing, electronics, furniture, etc.) from its food or logistics divisions. 

Divisions are separated by product line. For example, a tech company might have a division dedicated to its cloud offerings, while the rest of the divisions focus on the different software offerings—e.g., Adobe and its creative suite of Illustrator, Photoshop, InDesign, etc.

Divisions are separated by region, territories, or districts, offering more effective localization and logistics. Companies might establish satellite offices across the country or the globe in order to stay close to their customers.

Pros

• Helps large companies stay flexible 

• Allows for a quicker response to industry changes or customer needs

• Promotes independence, autonomy, and a customized approach

Cons

• Can easily lead to duplicate resources

• Can mean muddled or insufficient communication between the headquarters and its divisions

• Can result in a company competing with itself

A matrix organizational chart looks like a grid, and it shows cross-functional teams that form for special projects. For example, an engineer may regularly belong to the engineering department (led by an engineering director) but work on a temporary project (led by a project manager). The matrix org chart accounts for both of these roles and reporting relationships.

Pros

• Allows supervisors to easily choose individuals by the needs of a project

• Gives a more dynamic view of the organization

• Encourages employees to use their skills in various capacities aside from their original roles

Cons

• Presents a conflict between department managers and project managers

• Can change more frequently than other organizational chart types

6. Team-based org structure

It’ll come as no surprise that a team-based organizational structure groups employees according to (what else?) teams—think Scrum teams or tiger teams. A team organizational structure is meant to disrupt the traditional hierarchy, focusing more on problem-solving, cooperation, and giving employees more control.

Pros

• Increases productivity, performance, and transparency by breaking down silo mentality
• Promotes a growth mindset
• Changes the traditional career models by getting people to move laterally
• Values experience rather than seniority
• Requires minimal management
• Fits well with agile companies with Scrum or tiger teams

Cons

• Goes against many companies’ natural inclination of a purely hierarchical structure
• Might make promotional paths less clear for employees

See why forming tiger teams is a smart move for your organization.

These days, few businesses have all their services under one roof, and juggling the multitudes of vendors, subcontractors, freelancers, offsite locations, and satellite offices can get confusing. A network organizational structure makes sense of the spread of resources. It can also describe an internal structure that focuses more on open communication and relationships rather than hierarchy.

Pros

• Visualizes the complex web of onsite and offsite relationships in companies
• Allows companies to be more flexible and agile
• Give more power to all employees to collaborate, take initiative, and make decisions
• Helps employees and stakeholders understand workflows and processes

Cons

• Can quickly become overly complex when dealing with lots of offsite processes
• Can make it more difficult for employees to know who has final say

Consider the needs of your organization, including the company culture that you want to develop, and choose one of these organizational structures.

Once you've chosen the right org structure to pursue, learn the steps in the company reorganization process.

Shannon Williams graduated from BYU in English and then turned to the world of marketing. She works as a content marketing specialist at Lucid Software. Instead of writing her novel (like she should be), Shannon spends her free time running, reading, obsessing about Oscar season, and watching Gilmore Girls on loop.