Download - 16465 Organizational Structure(2)
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Organizational structure is a formal
system of job relationship that
coordinates employees to achieve acompany's goals with the use of
information systems.
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Functional structure
Divisional structure
Matrix structure
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In the functional structure, above, the employees are
working in departments based on what they are doing i.e.
we have engineering department, maintenance
department, finance department, research department,
Warehouse department, purchasing department.
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Advantage:-
For example, all the maintenance
engineers are working in the samedepartment and thus they will exchange
knowledge and support each other.
Disadvantage:-
This structure makes the coordination
between different department more
difficult than other structures.
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Divisional structure divides, shown above, the
employees based on the product/customer
segment/geographical location.
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For example, each division is responsible for certain
product and has its own resources such as finance,
marketing, warehouse, maintenace..etc.
Advantage:-
Accordingly, this structures is a decentralized
structure and thus allows for flexibility and quick
response to environmental changes.Disadvantage:-
On the other hand, this structure results in duplication
of resources because, for ex., we need to have
warehouse for each division. obviously, it does notsupport the exchange of knowledge between people
working in the same profession because part of them
are working in one division and the others are
working in other divisions.
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Matrix structure, shown above, combines both
structures. For example, we can have a functional
structure and then assign a manager for each
product. Some employees will have two managers:
functional manager and product manager. This
type of structure tries to get the benefits of
functional structure and also of divisional
structure.
Disadvantage:-It is not easy to implement because of the dual
authority. This structure is very useful for
multinational companies.
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What is your strategy?
How many products do you have?
What type of technology are you
using?
How big is your
company/organization?
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For example, if we think the divisional
structure is the best type for our conditionthen we should have tools to exchangeknowledge between engineers working indifferent divisions. These tools can include
forums on the LAN and conferences toexchange knowledge.
Conversely, if we adopt functional structure,we can form teams from different functionsto solve problems and develop our products.
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The results are not your perception that youare the best. Measure yourself compared
with similar companies. Do you need one week to take a decision
that they make in one hour?
Are your employees motivated more than
those in other companies? Are you developing new products and
services faster than other companies?
Are you achieving your main strategy?