Organizational structures are a description of how company’s manage or govern their internal operations. Classic structures — such as product or functional — may not provide companies with the best organizational method for their business. A hybrid organizational structure combines one or more of the classic methods.
A product organizational structure organizes a company’s operations based on the product lines offered by the company. Function structure separates the company based on activity, such as sales, marketing, accounting, production or human resources. Matrix organizations — the official term for hybrid structures — will use portions of these methods or a specialized structure.
Hybrid organization structures may initially be set up as a product structure, but then each product line will share resources among the different departments in each line. This avoids the duplicity of functions that essentially perform the same tasks for each product line.
While hybrid organizations avoid duplicate tasks,they create a dual reporting system. Individuals operating in accounting will have to report information to separate managers spread among the different product lines in the company.
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