Administrative Organization (Meaning and Explanation)

We explain what the administrative organization of a company is, its types, principles and main elements.

What is an administrative organization?

In business administration, the administrative organization is the set of methods and procedures put into practice to order, control and direct a company through its departments, resources and processes, in order to achieve its goals or objectives set in advance.

Every company or organization has its own pattern or order, which guides its production processes and is responsible for its margin of efficiency or effectiveness. That is, there are forms of administrative organization that are more effective than others, but every organization has an organizational structure that defines its hierarchies, its processes and its flows.

The review and eventual improvement of said structure, thus, will mean rethinking the circuits and patterns of the company, and can perfectly lead to better and more powerful scenarios.

At the same time, administrative organization is understood as a discipline and a business evaluation methodology which precisely aims to understand the functioning of organizations and conceive the models necessary for their study.

Types of administrative organization

Depending on its form and characteristics, it is possible to distinguish between several models of administrative organization, such as:

Linear organization This is the traditional, simple and pyramidal hierarchical model, which presents single lines of authority and information is transmitted in a unidirectional manner, from the superior global visions of the structure, to the local positions at the base. Decision making is completely centralized and there is a single leadership.
Functional organization This is the modern version of the previous model, which structures the company based on departments, each one equipped with its boss, and the total of bosses directed by the company's leadership, either individually or based on meetings. It is an ideal model for dividing the work into small parts, and decisions are usually made through consultations with the specialist in each area.
Matrix organization We work based on projects and expected results, through the constitution of multidisciplinary work teams to which individuals from various areas belong. These groups have a project manager, are temporary, and exchange information with other projects sporadically and occasionally. They behave, from the rest, like more or less autonomous cells.
Organization in committees It operates based on committees, that is, small groups that are assigned to study some specific stage or aspect of the production process, whether formally or informally. The members of the committees work separately and meet from time to time, generally involving the leaders or bosses of each section of the company, and vary according to the resolution of the specific situations to be addressed.
Clover organization It involves the external contracting or outsourcing of many of the company's tasks, whose fundamental work team is made up of those who direct the external tasks and coordinate the various efforts of the company. It is a model in vogue in times of low labor hiring.

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Principles of administrative organization

administrative organization communication — The administrative organization takes into account internal and external communication.

Every type of administrative organization must take into account the following:

Fidelity to the company's objectives Above all, a company must know what it is proposing and how, and the administrative organization must always respond to the latter. There is no point in having a Fordian assembly line if you plan to produce by outsourcingFor example.
Parity between responsibility and authority Authority and responsibility go together, and this precept is fundamental in the design of an administrative organization. When you hold positions of authority, you should receive a commensurate reward and a commensurate set of responsibilities. Otherwise, the hierarchy is destabilized.
Communication flow Communication within a company is essential, since an informed worker not only has more options when making decisions, but will feel more integrated into the organization and, in general, will have a better time. Each organizational model enables or disables certain types of internal and external communication.
Span of control There are more rigid organizational models, in which control is emphasized and there are constant feedback dynamics. There are other, more lax models in which the individual is granted a greater share of autonomy. This will determine the decision-making model chosen and influence other items on this list.
Continuity Every organizational model must be able to sustain itself over time, that is, it must be able to resolve situations and continue functioning, without tending towards chaos or inertia.

Elements of an organization

Every administrative organization is made up of the following elements:

Production factors All elements of the production chain are considered here, that is, those directly involved in the transformation of matter into goods or services. For example: machinery, workers, etc.
Direction factors Those elements that accompany the production process monitor and control it, but do not take a direct part in it, but rather indirectly, guaranteeing its operation. For example: management positions, contracts of outsourcingmarketing tools, etc.
Resources Those fundamental elements without which it would be impossible to carry out productive work. They can be material or physical (raw materials, energy, machinery, etc.) or immaterial (labor, work knowledge, etc.).

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