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The most common organizational structural forms include linear, functional, matrix, and divisional types.

First is the linear structure, also known as the hierarchical or classification system, which is a pyramid-type organizational structure. It is characterized by various positions arranged in a vertical linear system. A subordinate has only one superior who can give orders to him, and he also reports to only one subordinate who is subject to his supervision. For example, corps, divisions, brigades, regiments, battalions, companies, platoons and squads in the military system are concrete examples of this form. The advantages of this organizational structure are unity of command, clear vertical levels, clear responsibilities, and convenience for supervision. One drawback is that it is easy for higher- level leadership management to fall into daily administrative affairs and they may be unable to concentrate on thinking over and studying major issues. It is only suitable for completing repetitive work with a single fixed method, but not suitable for some non-standard tasks with a high degree of complexity.

Second is the functional structure, also known as the sub-post system. Its main feature is to set up corresponding functional management departments according to a specific division of labor, and to implement a specialized management of this division of labor to replace the linear- system, all-round leadership managers, such as ministries within government departments. The advantages of this organizational structure are that its staff understand the business and are familiar with the specific circumstances, and thus can make an authoritative decision. Generally speaking, its efficiency is higher than that of a linear organizational structure. Its disadvantage is that it is likely to cause a surplus of managers, which has a negative impact on subordinate units. Therefore, a functional organizational structure makes it is easy to split the unified leadership management processes between subordinate units and is not conducive to solving the various comprehensive issues involved.

Third is the mixed-type structure, also called the U-type structure. The main purpose of this organizational form is to set up two sets of leadership management system in an organization based on the straight- line system. One set is to establish a linear command system according to the principle of unified command; and the other set is to establish a

functional leadership management system based on the principle of the division of functions. This kind of structure has been widely used in enterprises and administrative departments. The integrated and stable organizational structure of the linear function system is centralized. It maintains the advantage of having a centralized and unified command arranged in a straight line, and absorbs the strength of the functional system playing its role in professional management. It is an organizational form whereby subordinates have direct contact across a unified chain of command. However, this structure also has shortcomings that are difficult to overcome, such as a lack of effective communication between various functional departments. Moreover, this system has too little lateral exchange of information; an unclear division of powers and responsibilities between horizontically arranged departments; an inclination towards conflict and friction; a lack of enthusiasm and creativity among the members of staff; and excessive management costs caused by a surplus of management personnel.

Fourth is the matrix structure, which is also known as the “planning- target” organizational structure. Its main purpose is to combine the departments divided by function with teams divided by product or project to form a matrix, and to get a good combination of vertical and horizontal links in corporate leadership management. The advantage of the matrix structure is that it can strengthen communication and cooperation between various departments, which improves the efficiency of solving problems. It is conducive to giving full play to the role of functional specialists, and to training and exercising their wide range of talents. In addition, this form also enables companies to adapt quickly to changes in market demand. However, the matrix structure also has some disadvantages. First, dual leadership management increases the number of people passed through in the process of information transmission, and this complex relationship brings about difficulties in coordinating work and defining responsibilities. Second, its temporary character leads to instability. Finally, the dual leaders result in a doubling of administrative expenses, which greatly increases the cost of leadership management.

Fifth is the divisional structure. This organizational structure is characterized by “centralized decision-making and decentralized management.” In other words, it combines decentralized management with independent accounting, and allocates responsibility and authority to each division to a maximum degree, thus enabling the top leaders to get rid of daily production operations to become a truly powerful decision-making body. The divisional organizational structure originates

from the General Motors Corporation in the United States in the 1920s. The advantage of this organizational structure is that it is more suitable for the facilitation of the distribution of knowledge, and complies with the requirements of increased information transmission and processing. Thus it improves information processing efficiency, simplifies ways of information transfer, and improves the efficiency of solving problems. It is helpful in improving market competitiveness and overall economic benefits of the divisions. Divisions can diversify risk to facilitate the assessment and evaluation of the operating performance of each one, and it also helps to improve the management capability of each divisional manager. The divisional system also has the following disadvantages: first, it is easy for the divisional system to cause departments to become insular, which affects collaboration and unity between the various departments due to their competitiveness; second, communication of information, personnel and technology among divisions is difficult; and third, the divisional structure can also greatly increase management institutions and staff, resulting in increased management costs. Although the divisional structure has these deficiencies, it is still widely used by many large companies. Very large companies with a wide variety of business and wide market coverage demonstrate the superiority of the divisional system.

Section 3. Types of leadership management