ORGANIZATIONAL STRUCTUREOrganizational structure refers to how an organization organizes people and jobs so that its work can get done and its goals can be achieved. When a work group is very small and face-to-face communication is frequent, formal structure may not be necessary, but in a larger organization decisions about delegating tasks need to be made. Procedures are thus established that assign the responsibilities of the various functions. It is these decisions that determine the organizational structure. In an organization of any size or complexity, employees' responsibilities are generally defined by what they do, who they report to, and, for managers, who reports to them. Over time these definitions become assigned to positions within the organization rather than to specific individuals. The relationships between these positions are illustrated graphically in an organizational chart (see Figures 1a and 1b). The best organizational structure for any organization depends on many factors including the work it does; its size in terms of employees, revenues and geographic dispersion of its facilities; and the range of its activities (the degree of diversification across markets). There are multiple structural variations that organizations can take on, but there are some applicable basic principles and a small number of common patterns. The following sections explain these models and provide the historical context from which some of them originated. The first section addresses organizational structure in the 20th century. The second section provides further details on traditional, vertically organized organizational structures. Descriptions of several alternative organizational structures follow, including those organized by product, function, and geographic or product market. Then there is a discussion of combined structures, or matrix organizations. The discussion concludes by addressing emerging and potential future organizational structures. ORGANIZATIONAL STRUCTURE IN THE 20TH CENTURY Understanding the historical context from which some of today's organizational structures developed helps explain why some structures are the way they are. For example, why are older but still operational steel mills like US Steel and Bethlehem Steel structured using vertical hierarchies? Why are newer mini-mills like Chaparral Steel structured more horizontally, leveraging the innovation of their employees? Part of the reason, as discussed in this section, is that organizational structure has a certain inertia: the idea borrowed from physics and chemistry that something in motion tends to continue on the same path. Changing the structure of an organization is a daunting managerial task, and the immensity of such a project is at least partly responsible for why organizational structures rarely change.