ORGANIZATION STRUCTURE CHAPTER 5: ORGANIZING

Functional Structure

The logical and basic form of departmentalization. It is used mainly by smaller firm that offers a limited line of products because it makes efficient use of specialized resources. Another major advantage of a functional structure is that it makes supervision easier, since each manager must be expert in only a narrow range of skills. In addition, a functional structure make it easier to mobilize specialized skills and bring them to bear where they are most needed. (Refer slide 1) Functional Structure

Geographical/Regional Structure

An organization sales function might have western, southern, mid western and eastern regions. If an organization customers are scattered over a large geographic area, this form of departmentalization can be valuable. Geographic departmentalization is logical when a plant must be located as close as possible to source of raw materials, to major markets or to specialized personnel. Geographical/Regional Structure

Product Structure

Often referred to as organization by division, brings together in one work unit all those involved in the production and marketing of a products or a related group of products in a certain geographic area. Unlike functional department, a division resembles a separate business. The division head focuses primarily on the operations of his or her division, is accountable for profit or loss, and may even compete with other units of the same firm. But a division is unlike a separate business in one crucial aspect: the division manager must still report to central headquarters. Product Structure

Matrix Structure

During the 1960s, an unusual organization arrangement known as the matrix organization was developed by companies in the U.S aerospace industry. This matrix structure sometimes referred to as a "multiple command" system, is a hybrid that attempts to combine the benefits of both types of designs while avoiding the drawbacks. An organization with matrix structure has two types of structure existing simultaneously. Employees have in effect two bosses-that is they work in two chains of command. One chain is a functional or division. The second is a horizontal overlay that combines people from various divisions or functional departments into a projects led by a project or group manager who is an expert. Matrix Structure

Mixed Organization Structure In many organization, rigid departmental division are being replaced by a hybrid grouping of individuals who are experts in various specialties and who work together in an organizational arrangement known as cross-functional team. What’s unique about mixed organization structure is that they bring together a diversity of experts who might never cross path in a traditional organization although their work might be highly interdependent. The mixed organization structure are doing everything from designing a new products and seeing that it makes it to the marketplace, to preparing a long term corporate strategy.