Popular Organizational Structures
1. Mechanistic Organizational Structures
A functional organizational structure is hierarchical and organizes according to job functions. This is also one of the most common and traditional organization structures. This approach is highly scalable and can grow with the business.
The product-based approach organizes according to the product that they are developing. It is further divided into different departments, such as marketing, production, and communication. This approach allows businesses to develop and maintain different products in parallel and shorten the production and distribution processes.
Market-based structures divide according to the target market – such as Government, Residential, Millennials, and others. It is further grouped into the aspect of the business that they are handling, such as Marketing, Production, or Quality Control. This structure is best-fit for businesses that target specific markets or targeting diverse markets.
Businesses can be organized according to the region, area, or districts. This is most effective for businesses that prioritized being close to their suppliers or customers. However, this approach can lead to decentralized decision making and each highly autonomous divisions. The business processes can run the risk of the divisions competing with each other.
2. Organic Organization
Organic organizational structure prioritizes the product and the skills of the employed responsible for developing them. This structure is less rigid and tends to be more ad-hoc in its management and processes. This structure allows for flexibility and is scalable for businesses that are adapting to a rapidly changing industry or internal business shifts.
Influences to Organizational Structure
There are several considerations when developing or managing an organizational structure. We found that the most significant considerations are the size of a business, the strategies it employs, its business and working environment, and the legal limitations of its operations.
1. Size of the company
In small to medium businesses, it is more common that the owners have more control and say over the organizational structure. It is more manageable by the owner and requires a lot less resource and strategizing. However, in large businesses, the size of the company drives the organizational structure and requires more complexity.
2. Business strategies
Understanding the business strategy of a company is essential in establishing the organizational structure of a company. As companies grow, business strategies and structures may also change. Having an adaptable structure enables companies to grow and adjust faster. However, leaders and managers may lose a certain amount of control of the business once these changes take place.
3. Business environment
The environment that the business is or will operate in plays a major role in determining a company’s organizational structure. External factors such as resource and supply procurement, market uncertainty, and competition are considerations when designing organizational structure. Businesses can be efficient and adaptable internally, but they should also be capable of adapting and coping with external influences. This enables the business to be more responsive to their chosen market and more flexible to changes in the status quo.
4. Technology and tools
Technology enhances the structure, processes, and tools of a business. It also has the potential to be a competitive advantage and source of economic value for the company. Businesses that incorporate technology can enhance internal and external communications, and be more effective and efficient in their routines.
The technological environment for businesses has expanded towards adapting virtual teams and networks. Companies are now able to enhance their business processes by extending their businesses and employing or collaborating with virtual teams all over the world.
Employing Offshore Development Services
Outsourcing enables businesses to unload some of their processes or projects to external teams, such as employing offshore development services. Major benefits of employing offshore services are:
- Reduced operational and offshore development costs
- Access to scalable process and software development services
- Opportunity to choose from a wide selection of services and management approaches
- Opportunity to employ skilled global professionals
Reduced overhead costs
Depending on the offshore company, outsourcing collaboration can be limited to just specific processes or entire teams and management of such teams. An offshore company is capable of providing more competitive prices and cost compared to internal or local services. This process also reduces the need to spend on setting up and maintaining such services locally or internally.
Access to expert global software developer teams
By outsourcing and collaborating with offshore software development companies, companies can employ expert professionals from all over the world. The diverse skills, experience, and working environment can further enhance the company.
Scalable levels of software development services
Offshore development companies offer scalable levels of services. Offshore service collaborations can be dependent on the scale of the project or the amount of oversight that the company wants of the project.
Low-level outsourcing of software development and business processes enable companies to manage the product, while the outsourcing service provider handles the development and quality control aspect of the product.
With high-level outsourcing, companies still retain management of the process or the project as well as QA testing design and actual testing. The outsourcing company handles solutions and project development.
The last outsourcing model based on the scope is the complete technical outsourcing of a project or a process. This is when companies complete outsources all technical aspects of a process or a project.
Wide-array of offshore developer services
Staff augmentation enables companies to employ offshore teams to supplement and support their internal teams to efficiently perform tasks.
Hiring project-based teams is also an option for companies dealing with short, specific, and time-bound projects. Project-based teams work on projects with defined goals, timeframe, and development process.
Companies can also hire offshore development centers for their long-term projects. This helps companies manage the work of the project, reduce costs, and maintain the quality of their products. With this approach, companies hire and independently manage offshore dedicated development teams for their projects.
Diverse software development models
Aside from the project scope, companies also have the option of hiring various types of offshore software development teams. Dedicated development teams are offshore software developers focused on designing and developing one project at a time. They are the best fit for long-term projects.
Offshore software developers can also be hired on a time-bound basis. This approach is best for small to medium-sized projects that requires flexibility to adapt to changes during the process.
One of the most common and secure approaches is fixed-cost outsourcing. Development teams are hired to complete a project with a fixed cost and defined scope. The company is in no danger of acquiring hidden offshore development costs or extensions. Expanding by collaborating with offshore software development providers can enhance and enrich your company! With the right team and the right project, this approach can greatly benefit you and your customers in the long run.