Which organizational structure is more effective for creativity and innovation and why? 1- Hierarchy. 2- Horizontal. 3- Matrix.

A flat or horizontal structure is probably the best option as it allows all level of employees to have a say in the discussions, negotiations and solving business issues. A horizontal structures gives the confidence as well as boosts employee morale (as they feel wanted). An example will be of Google which has a flat structure giving all employees the responsibility to come up with new creative ideas and innovative solutions.

Prefer Matrix...

The matrix sturcture groups employees by both function and product. This structure can combine the best of both separate structures. A matrix organization frequently uses teams of employees to accomplish work, in order to take advantage of the strengths, as well as make up for the weaknesses, of functional and decentralized forms. An example would be a company that produces two products, "product a" and "product b". Using the matrix structure, this company would organize functions within the company as follows: "product a" sales department, "product a" customer service department, "product a" accounting, "product b" sales department, "product b" customer service department, "product b" accounting department. Matrix structure is amongst the purest of organizational structures, a simple lattice emulating order and regularity demonstrated in nature.

• Weak/Functional Matrix: A project manager with only limited authority is assigned to oversee the cross- functional aspects of the project. The functional managers maintain control over their resources and project areas.
• Balanced/Functional Matrix: A project manager is assigned to oversee the project. Power is shared equally between the project manager and the functional managers. It brings the best aspects of functional and projectized organizations. However, this is the most difficult system to maintain as the sharing of power is a delicate proposition.
• Strong/Project Matrix: A project manager is primarily responsible for the project. Functional managers provide technical expertise and assign resources as needed.
• Matrix structure is only one of the three major structures. The other two are Functional and Project structure.
• Matrix management is more dynamic than functional management in that it is a combination of all the other structures and allows team members to share information more readily across task boundaries. It also allows for specialization that can increase depth of knowledge in a specific sector or segment.

Structures are based on job roles and human potentials where in controlling and delegating decision making varies. It does not have an impact on the potential of effectiveness or freedom for creativity and innovation. 

First matrix: Team based work

Second horizontal: Team besed work.

Does it serve a noble mission?

A purposefully designed organizational structure is more aligned to goal achievement. You are placing a certain employee in that certain department because you believe in his capability in delivering excellent work. A purposeful structure also determines the necessity of certain mission which could otherwise be redundant with other functions or departments. To develop a purpose start with Leadership value Creation. Here is an article on how to be a Values-based Leader?

Does it empower creativity and efficiency?

Efficient and creative employees translate to more motivation, happiness, profit and client satisfaction. Your organizational structure should be designed in such a way that it empowers creativity and efficiency. Employees’ functions should be well-defined and they should know to whom they report. Supervisors should also know what and who to oversee to continuously stimulate creativity and efficiency. The structure also makes it clear who does the job to eliminate redundancy and overlapping of tasks. For more information on new goverance management styles check this article on Holacracy.

Does it work for your type of organization?

It is safe to assume that a simple organization with15 employees or less can effectively follow a simple organizational structure. But if you are running a large business that needs several departments and employees, then your structure should cater that too. There is no universal formula for an effective structure; they may have the basic departments such as HR, accounting, administration and so on, but the type of structure you work with is best tailor-fitted to the type of organization you have.

Build a workplace where creative people can thrive

If you want to develop a creative corporate culture, there’s nothing worse than working in an environment that doesn’t stimulate creativity.

So, I’ve selected2 workplaces that foster a creative spirit. Spaces are designed for people connection and according to the company mission.

Mind Valley

In this speech Vishen shares the5 Principles he brought into Mindvalley to transform it into one of the world’s best places to work. Vishen shares principles he adapted from a wide variety of sources, from psychology, to computer games, personal growth, eastern spirituality and an understanding of Generation-Y in order to change his organizational strucutre.

The5 Principles are:

1. Happiness
2. A Noble Mission
3. The Gamification of the Workplace
4. A Focus on Personal Growth
5. Tribal Dynamics

Zappos

“Zappos Culture is the overall environment; space, attitude, freedom, management style, and actual physical surroundings which all work together to create a total milieu which attempts to make each individual better and happier on a whole, so that each one of us will then spread this to each other, our customers, and everyone we encounter. ”-Mike S. Employee since2005

Zappos Core Values

1. Deliver WOW Through Service
2. Embrace and Drive Change
3. Create Fun and A Little Weirdness
4. Be Adventurous, Creative and Open-Minded
5. Pursue Growth and Learning
6. Build Open and Honest Relationships With Communication
7. Build a Positive Team and Family Spirit
8. Do More With Less
9. Be Passionate and Determined
10. Be Humble

For furhter information on Zappos Culture: Holacracy the New Organizational Goverance of Zappos

1 – Analyze your current structure.

Take a look at what you have right now and draw your structure considering all the departments and functions. Determine if the employees are indeed placed in positions that explore all their potentials and if the supervisors are indeed holding the right departments.

2 – Draw your “dream” structure.

This is the structure that includes all the desired positions and departments regardless of budget. Write down the job description and duties for each function.

3 – Compare or benchmark

Now that you have two structures, compare them and see which one is most effective and needed by the organization. Do you really need to acquire new hires to do the additional functions you listed, or can another employee do that without sacrificing productivity? Do you need to move employees to another department? Answering these questions will lead you to better alignment of functions.

4 – Communicate with your employees.

Should you want to implement the changes and improvements in your structure, a dialogue has to take place. You need to involve your employees and they need to know what are expected from them given their new functions. Facilitate meetings regularly to check what every department is working on and what their recent achievements are. Meetings are also good venues to evaluate creativity, efficiency and how departments can help one another.

5 – Determine if split-ups or mergers are needed.

Some companies combine sales and marketing functions, while accounting is an all-together different department. Deciding whether split-ups or mergers are needed is definitely up to the structure needed by your organization. Can your sales department function on its own? Does your marketing team need to split up functions such as advertising, public relations and such? Of course you need to consider that these will require another physical set up and more employees.

To recap, before you begin an organization or consider if redesigning your organizational structure is necessary, you should:

•  Take a look at the mission of your structure.
• Determine if it encourages creativity and efficiency.
• Check if it is suitable to your type of organization.
• Build a dream structure and compare it with your current one. Determine if there are missing or redundant positions and if split-ups or mergers are necessary to improve company performance.
• Build a workplace where creative people thrive

Your organizational structure forms the culture landscape of your company. It structures everyone with their tasks and follows an adaptive chain of command. An effective organizational structure supports the efficiency and creativity of every employee, opens communication, innovation breakthroughs, release happiness, reduces turn-over and increase client satisfaction.

Matrix,

dont west time for looping.

STRATEGIC BUSINESS UNITS

This approach to encourage new ways of thinking and acting is to reorganize parts of the company into largely autonomous groups,

It's Matrix structure.

It has to be the matrix when it comes to creativity and innovation as it is the least classic structure and it links everyone together rather than sticking to the default hierarchy which limits the business into the standard pattern.

If creativity/innovation is contained within a small team (and not spread out through the entire organization), then I would go for the flat (one-level) organization for this specific function only. The rest of the organization will have its own (best -fit) structure whether it is hierarchy or matrix

I agree with mr. Vrindavan, but as it is not mentioned in the choices of the question, I will choose for a Matrix.