The traditional structure of organizations commonly used by our forefathers is falling by the wayside as modern organizations, rocked by the effects of downsizing and reengineering, try to increase their organizational effectiveness. From the early 1900's through the early 1980s, organizational charts held the classical pyramid structure, with key managers positioned at the top and workers at the bottom. In recent times, these pyramids have given way to new shapes as organizations attempt to portray the more complex relationships that have grown among employees and managers.
Organizational structure refers to the way that the parts of the organization are put together.
An organization's initial structure is created in response to its environment. The forces that come together to create this environment include a conscious coordination of effort, a common goal, a division of labor, and a hierarchy of authority. Once created the structure of an organization can affect the inventiveness and innovativeness of activities in the firm by restricting communication, decision making, and employee participation in the success of the organization. The structure of an organization generally reflects the type of work done. In the old mass-production economy, standardization was the key.