The Formal organizational structure (also just organizational structure) is an officially codified hierarchical arrangement of relationships between different jobs within the organizational units and relationships between departments within the organization (shown in a Organigram). It includes hierarchical relationships and assigns competence, ties and responsibilities. A formal organizational structure is necessary for the management of a bigger number of people, because it unites different business activities, processes and people and formalizes their relationships to achieve the common objectives of the organization. There is no optimal organizational structure. There are only organizational structures that optimize the deployment of management and staff to achieve the organization’s goals.
The formal organizational structure of an organization is a type of a social network. Depending on the type and size, there are different typologies of formal organizational structures.
The formal organizational structure includes: