The typically hierarchical arrangement of lines of authority, communications, rights and duties of an organization. Organizational structure determines how the roles, power and responsibilities are assigned, controlled, and coordinated, and how information flows between the different levels of management.

A structure depends on the organization’s objectives and strategy. In a centralized structure, the top layer of management has most of the decision making power and has tight control over departments and divisions. In a decentralized structure, the decision making power is distributed and the departments and divisions may have different degrees of independence.

A company such as Proctor & Gamble that sells multiple products may organize their structure so that groups are divided according to each product and depending on geographical area as well.

‘Organizational structure’ in a Sentence

Having a good organizational structure will lead to much better decisions by your business for its long term investment goals.

My buddy did not want to work on Saturday, but he complained to the plant manager instead of our department supervisor, completely ignoring the organizational structure of our company.

Before the man began working at his new job, he wanted to know the organizational structure and who was in charge.