To achieve organizational goals and objectives, employee activities within the organization need to be coordinated and managed. To achieve this coordination, the organization must have a structure to it. Organizational structure is essential in specifying reporting relationships, delineating formal communication channels and in linking all activities together toward organizational goal achievement. There are two primary structure types; organic and mechanistic. There are four main elements to organizational structure; centralization, formalization, hierarchy, and departmentalization.

These elements often coexist in organizational structures and their configuration will determine whether an organization is organic or mechanistic. Organic organizations are less formal and more flexible than traditional organizations and are characterized by such things as flexibility, informality, and knowledge based authority. An organic structure is laid out like a network and emphasizes horizontal specialization, personal coordination, and extensive communication. Organic organizations are generally flat and decentralized, with little reliance on formal authority, which enables faster decision making. Mechanistic structures are primarily hierarchical, with an emphasis on specialization, and vertical communication. Mechanistic structures also place an emphasis on control by relying on rules, policies, and procedures in conducting operations. Mechanistic structures are highly formalized and centralized and as a result are more rigid and resistant to change. Determining which structure is best is dependent on the stage of development the organization and its industry are in. Firms in mature, stable environments may find greater success with the mechanistic structure while established firms in dynamic or turbulent environments may find greater success with the organic structure.