The importance of organizational structure in modern organizations

Factors Influencing Organizational Structure

The development of the organization in the modern world is highly dependent on the organizational structure of the enterprise. There are major factors in the form of internal environment and external environment. It is important that these areas are covered so that there are no obstacles to the growth of the company. Evidence has shown that it is important to have an organizational structure that adapts to the changing nature of the internal and external environment (Ahmady, Mehrpour & Nikooravesh, 2016). KDH Hospital is looking for a change and the organization’s current organizational structure is a functional one, but this structure is not suitable for the changing internal and external environment. An alternative system that can be adopted by Katandra District Hospital is the matrix organizational structure. An appropriate analysis will be performed in this essay on the current structure of Katandra County Hospital. This essay will also talk about the pros and cons of functional organizational structures. He will also talk about how the matrix structure will be useful for Katandra District Hospital.

Organization has had a major impact on the success of an organization. It all depends on how eager the organization is to achieve its goals. Organizational structure includes the roles and responsibilities of individuals and defines how information flows between different levels within an organization (Winnubst, 2017). It is seen that the organizational structure should be simple, easy to communicate from top to bottom, and that the company’s employees have a good knowledge of the company’s vision and mission. A good organizational structure must always be highly adaptable to the change of the internal and external environment of the enterprise.

It is important to analyze the current structure at the Katandra district hospital. Katandra District Hospital has 100 beds and the structure present in the hospital is a functional organizational structure. In a functional organizational structure, the business structure of the organization is divided according to skills or expertise (Bai et al., 2017). In this structure, the departments do not communicate with each other and this is one of the things that can cause problems for the growth of the organization.

After analyzing the current scenario, it can be said that there is a change taking place in the hospital and the current structure will not be effective. The number of hospital beds will be 300 and this means a lot of communication for staff. That’s why Katandra County Hospital should consider adjusting its structure to allow staff to communicate better. Internal environmental factors such as workforce needs and changing community needs must be addressed with an appropriate set of organizational structures (Strese et al., 2016). But before that, let’s analyze the pros and cons of a functional organizational structure.

After analyzing the structure of the functional organization, it can be said that in this structure the employees are grouped into their divisions and this helps them to achieve their goals. It is found that when employees work together, efficiency increases because they can share quality information (Mao et al., 2017). In the hospital sector, subgrouping has a major impact on the performance of individuals. The division of labor present in the work environment is good for achieving goals.

Functional Organizational Structure

Divisional division ensures that people with specific skills work in their department (Rahbek-Clemmensen et al., 2017). They don’t have to work in another department because this department is completely skill-based. It is found that when there are separate departments in the structure, the organization is not under any pressure. There is no room for tension to develop in each individual.

The main problem in this type of structure is that there is no room for good communication between the two parts. When there are changes in an organization, there must be good communication between different departments. Vision and mission cannot be achieved without good communication between different departments. It has also been found that when the external environment changes, those in power need to react more quickly. But in a functional organization, only the general manager manages the entire department, which makes it difficult to manage change.

Another major challenge that can be observed in this structure is centralized decision making. The decision is made by a central authority and no one else can be involved in it, making it difficult to access the organization during an emergency in an external environment (Fairfield, 2016). . For these reasons, Katandra District Hospital should expect a new organizational model.

When analyzing the current needs of the organization, it can be said that the matrix structure is suitable for Katandra County Hospital. It would not be wrong to say that this organizational structure ensures that people from different organizational structures communicate properly (Patri & Suresh, 2017). This structure helps the company in the change process and promotes change among employees. We have found that this structure can provide the necessary support. It has been found that when there is a change in the environment, many people can handle the change compared to a functional model where only the CEO has to manage the changes. Thanks to the matrix structure, it is easy to organize and coordinate when the organization is going through a change (Kishore, Pretorius & Gopinath, 2019).

The main benefits that have been observed after analyzing the matrix structure can be seen in the form of open communication among employees which improves the environment in the workplace. In the medical field, it is important to have good communication because it promotes a good environment. Having a collaborative work environment facilitates work (Benzer et al., 2017). Individuals from different fields communicate and give their opinions on select issues. This helps to improve the quality of care provided in the hospital. Formative feedback has been found to play an important role.

Having a clear project goal in front of individuals also helps them stay focused. The functional staff combine with general managers and ensure that employees do not run into problems (Berkowitz, 2021). Employee time is used meaningfully and time is not wasted.

Advantages and disadvantages of functional organizational structure

However, the matrix organization structure has some disadvantages. It has been found that employees have to report to many people, which increases the complexity of the organization. When there is complexity in the structure, the impact can be on employee productivity. It has been found that this structure is quite complex and many employees may also encounter difficulties.

There are too many senior authorities and this can create a kind of conflict within the top management in the matrix structure (Vaishnavi, Suresh & Dutta, 2019). It has been found that management conflicts can be resolved by assigning different powers to different roles. There is an issue of roles that are not clearly defined among employees. It can slow down the decision-making process and can make it difficult for the organization,

After analysis, it can be said that the matrix structure is better because Katandra district hospital is going through a change and it is important to adapt to that change. Changes can be accepted with a matrix structure. There is enough room for communication in this structure, and the internal and external variation of the environment can easily be handled in a matrix structure compared to a functional one.

Based on the above analysis of the two structures, it can be said that Katandra District Hospital can expect to change its organizational structure. Major changes are taking place within the organization and this will require an appropriate structure that can cope with changes in the internal and external environments. The functional structure isn’t bad but it doesn’t have enough room to communicate and that can be a big problem for them.


Ahmady, G. A., Mehrpour, M., & Nikooravesh, A. (2016). Organizational structure. Procedia-Social and Behavioral Sciences, 230, 455-462.

Bai, W., Feng, Y., Yue, Y., & Feng, L. (2017). Organizational structure, cross-functional integration and performance of new product development team. Procedia Engineering, 174, 621-629.

Benzer, J. K., Charns, M. P., Hamdan, S., & Afable, M. (2017). The role of organizational structure in readiness for change: A conceptual integration. Health services management research, 30(1), 34-46.

Berkowitz, E. N. (2021). Essentials of health care marketing. Jones & Bartlett Learning.

Fairfield, K. D. (2016). Understanding functional and divisional organizational structure: A classroom exercise. Management Teaching Review, 1(4), 242-251.

Kishore, N., Pretorius, J. H. C., & Chattopadhyay, G. (2019, December). The Roles of Functional Managers and Project Managers in a Matrix Organization. In 2019 IEEE International Conference on Industrial Engineering and Engineering Management (IEEM) (pp. 784-788). IEEE.

Mao, P., Li, S., Ye, K., & Cai, H. (2017). A field theory based model for identifying the effect of organizational structure on the formation of organizational culture in construction projects. KSCE journal of civil engineering, 21(1), 45-53.

Patri, R., & Suresh, M. (2017). Modelling the enablers of agile performance in healthcare organization: a TISM approach. Global Journal of Flexible Systems Management, 18(3), 251-272.

Rahbek-Clemmensen, T., Lycas, M. D., Erlendsson, S., Eriksen, J., Apuschkin, M., Vilhardt, F., … & Gether, U. (2017). Super-resolution microscopy reveals functional organization of dopamine transporters into cholesterol and neuronal activity-dependent nanodomains. Nature communications, 8(1), 1-14.

Strese, S., Meuer, M. W., Flatten, T. C., & Brettel, M. (2016). Organizational antecedents of cross-functional coopetition: The impact of leadership and organizational structure on cross-functional coopetition. Industrial Marketing Management, 53, 42-55.

Vaishnavi, V., Suresh, M., & Dutta, P. (2019). A study on the influence of factors associated with organizational readiness for change in healthcare organizations using TISM. Benchmarking: An International Journal.

Winnubst, J. (2017). Organizational structure, social support, and burnout. In Professional burnout (pp. 151-162). Routledge.

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