![]() This structure uses permanent cross‐functional teams to integrate functional expertise with a divisional focus.Įmployees in a matrix structure belong to at least two formal groups at the same time-a functional group and a product, program, or project team. The matrix structure combines functional specialization with the focus of divisional structure (see Figure 3). In addition, competition among divisions may develop due to limited resources. Because managers are so specialized, they may waste time duplicating each other's activities and resources. However, divisional structure does have its drawbacks. As a result, this structure is flexible and responsive to change. ![]() Divisional structure also makes performance easier to monitor. These departments allow managers to better focus their resources and results. ![]() This grouping of departments is called divisional structure (see Figure 2). Examples include departments created to distinguish among production, customer service, and geographical categories. These departments are divided according to their organizational outputs. In the long run, this specialization results in executives with narrow backgrounds and little training handling top management duties.īecause managers in large companies may have difficulty keeping track of all their company's products and activities, specialized departments may develop. Managers do not have the opportunity to see how all the firm's departments work together and understand their interrelationships and interdependence. The functional structure gives managers experience in only one field-their own.Decisions and communication are slow to take place because of the many layers of hierarchy.In addition, reduced cooperation and communication may occur. As a result, anticipating or reacting to changing consumer needs may be difficult. Managers may have a hard time relating to marketing, for example, which is often in an entirely different grouping. The functional structure can result in narrowed perspectives because of the separateness of different department work groups.Not only can this structure improve productivity by minimizing duplication of personnel and equipment, but it also makes employees comfortable and simplifies training as well.īut the functional structure has many downsides that may make it inappropriate for some organizations. Production, marketing, finance, and human resources are common groupings within a functional structure.Īs the simplest approach, a functional structure features well‐defined channels of communication and authority/responsibility relationships. The functional structure groups positions into work units based on similar activities, skills, expertise, and resources (see Figure 1 for a functional organizational chart). For example, the organizational design trend today incorporates a minimum of bureaucratic features and displays more features of the organic design with a decentralized authority structure, fewer rules and procedures, and so on. All five approaches combine varying elements of mechanistic and organic structures. The five structures are basic organizational structures, which are then adapted to an organization's needs. Five common approaches - functional, divisional, matrix, team, and networking-help managers determine departmental groupings (grouping of positions into departments). Managers must make choices about how to group people together to perform their work. Personal Challenges for Global Managers.World‐Class Quality: ISO 9000 Certification.Productivity and Total Quality Management.Effective Organizational Control Systems.Five Approaches to Organizational Design.Factors Affecting Organizational Design.Decision Making with Quantitative Tools.Conditions that Influence Decison Making.Introduction to Managerial Environments.
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