What is a team based structure?

By Deepak Palasamudram3 min read · Posted Apr 2, 2023


Team-based structures are commonly used within companies to achieve specific goals. In this structure, multiple teams work together to complete specific tasks while achieving a common goal. Effective team-based structures require efficient communication, creative thinking, collaboration, and problem-solving. There are four main types of team-based structures, which arehierarchical structures, circular structures, matrix structures, and functional organizational structures. Read more to learn about each one!

Types of Team-Based Structures

Hierarchical Structure

The hierarchical structure is a common team-based structure where each level is above the next. It takes the shape of a pyramid, with the president or CEO at the top, responsible for overseeing the overall structure and making financial decisions. Below them are managers and directors who supervise employees and guide their tasks. At the bottom are regular employees who carry out daily assignments delegated by their managers. This structure emphasizes authority and specifies roles for each team member based on their position in the hierarchy. It motivates employees to work hard and move up the ranks. However, the hierarchical structure can be slow to respond to changes in the business environment, and communication problems can arise due to power imbalances and limited opportunities for input from lower-level employees.

Circular Structure

The circular team structure is similar to a hierarchical structure but is organized in a circular fashion rather than a pyramid. High-level leaders such as presidents and managers occupy the inner circle, while lower-level employees are situated in the outer circle rings. The number of rings also depends on the number of roles within the business. It is controlled as the center moves towards the outer circles, spreading information and not being "superior" compared to hierarchical. The structure is designed to facilitate communication and foster strong relationships between employees. However, a potential downside to this structure is that it may only be suitable for some businesses, as it may not be efficient or effective when a business has too few or too many roles.

Additionally, the circular structure may create confusion regarding job responsibilities, leading to communication issues from one part of the business to another and decreased productivity.

Matrix Structure

The matrix structure is a unique type of team-based structure in which employees report to multiple leaders and managers, enabling collaboration and communication. The structure is shaped like a chart, with departments listed horizontally and project teams listed vertically, and the intersection of each department and team creates a matrix. The advantage of a matrix structure is that it allows for a higher degree of flexibility and adaptability to changing project needs while receiving expertise from different areas of the organization. However, a potential disadvantage is the complexity of the structure, which can lead to confusion over roles and responsibilities and potential power struggles between different leaders. Effective communication and collaboration are crucial for success in a matrix structure, as it requires employees to balance the demands and expectations of multiple leaders.

Functional Organizational Structure

The functional organizational structure is a simple team-based structure in which employees who share similar skills and knowledge work together to enhance their expertise and support each other's professional growth. Such a structure enables companies to achieve growth and innovation by leveraging the specialized expertise of functional departments. However, this structure's downside is the need for more communication and collaboration across departments, which may focus on individual tasks rather than the overall business objectives, leading to long-term issues.


As we can see, team-based structures are essential to business success, with the use of employees and upper management to connect, allowing the businesses to meet their objectives and thrive. Four main team-based structures could be used in your business: hierarchical structure, circular structure, matrix structure, and functional organizational structure.


About The Author

Deepak Palasamudram


Hello, I am Deepak, a high school student and an Article Writer for Pitch Labs. Along with my love of writing and teaching others, I am passionate about entrepreneurship, finance, and coding. I plan to delve more into these subjects in the future.

See more posts by Deepak Palasamudram



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