Which type of organizational structure is characterized by interpersonal relationships influencing decision-making?

The correct choice highlights the informal structure, which is characterized by interpersonal relationships significantly influencing decision-making processes within an organization. In an informal structure, communication flows more freely through personal connections, friendships, and social networks rather than strictly adhering to formal channels or bureaucratic procedures. As a result, decisions can often be shaped by the influence of these relationships rather than by hierarchical authority or documented policies.

In contrast, formal structures operate on established rules and documented procedures, where decisions are made following an official chain of command, leaving little room for personal influence. A matrix structure, while flexible and promoting cross-functional collaboration, still relies on established roles and responsibilities that guide decision-making, focusing on organizational objectives. Hierarchical structures, with their clear levels of authority and strict reporting lines, emphasize formal processes in decision-making, minimizing the impact of interpersonal relationships.

The informal structure's reliance on personal ties allows for quicker decision-making and adaptability, as it harnesses the knowledge and insights of individuals who may not hold formal positions of authority but possess valuable expertise or influence within the organization. This interaction fosters a dynamic work environment where collaboration and trust can enhance overall performance.