An orderly hierarchy in which people are related in a meaningful sequence will result. It may take more time to take a decision. Advantages There becomes reduced personal responsibility for any business debts incurred Legal liability also becomes reduced since a company is a separate legal entity from you as an individual Company tax rates are lower compared to higher marginal tax rates It can be much easier to raise finance and capital to grow and expand Divisional structure has some advantages: ii. Although the prisoners faced chaos and destruction in the concentration camps, the camps themselves were relatively organized. Separate strategic and operational control, iii. 2. It may give rise to conflicts between divisions. It facilitates product expansion and diversification. Taking everything on ones head has its own risks and disadvantages. Structures that allow for better communication. mu_\-w;@M8#)L);,-/9grt7S0S~ Advantage: Specialization. Content Filtration 6. Acts as a point of view through which individual can see their association and its condition. Boundary less organizations are better equipped to manage these features. iii. Hill, B. There are different bases on which various divisions in an organization can be created. (iii) It leads to greater satisfaction of customers which enhances the reputation of the enterprise among the public. Clear accountability, ii. In a decentralized structure, the energetic drive is appropriated and the workplaces and divisions may have different degrees of independence. vi. ii. This structure is a hybrid type used in startups and small companies. Functional structure is generally found in organisations in which, single product/services is offered. Each participating company contributes what it does best. It enlivens graduation and inventive thinking. childlike, innocent adj. (iii) Co-ordination between line and staff may become difficult. For example, in an insurance company, departmentation may be achieved on the basis of these functions, viz., underwriting agency, claims adjustment and administration. List of Advantages of a Flat Organizational Structure 1. Functional design fosters a limited point of view that focuses on a narrow set of tasks. It promotes development of managers through increased involvement in decision-making. Employees who work in such a structure are well organized and grouped according to tasks and functions, Employees focus on specific work or mission, This structure lacks teamwork, communication and discussion, This structure also lacks creativity and it limits the employees ability to develop and improve, Each department operates as an independent company that work on its own aspects & divisions and specify budgets to control its own resources, It offers flexibility by allowing each employee to operate as if its own company, reporting to CEO, one or two upper supervisors, Employees working in different departments, but the same function are unable to communicate well, Divisional structure may have tax implications by raising issues with accounting practices, Sharing knowledge between the employees across different functional divisions, Attaining strong communicational skills & understanding roles, Broadening employees skills & knowledge, thus increasing professional company growth, Creating confusion and conflict between supervisors and bosses about the issue to be reported, Creating confusion regarding employees job roles if not clearly defined, It eliminate red tape that might stall innovation in functional structure, This structure could be confusing and inconvenient if all employees involved dont agree on the way of organizing the structure, Makes it more difficult to coordinate the activities and functions of a larger number of subordinates, This structure have been criticized on the ground that they put a lot of pressure on subordinates by imposing on them too much of responsibility. These networks are not fully reliable at all times. Functional structure is helpful up to a certain limit of expansion and growth. Enhances ability to respond quickly to changes in external environment. One advantage of the matrix organizational structure is that people across different functional areas have a better understanding of their coworkers in other areas. WebAdvantages: Employees who work in such a structure are well organized and grouped according to tasks and functions Employees focus on specific work or mission As such, there is always a lack of proper coordination and control. Allows new business and new products to be added easily. Weba piece of cake a piece of old tackle a pushover as easy as ABC as easy as falling off a log as easy as pie a snack a snap a snip child's play duck soup easy-peasy kids' stuff money for jam money for old rope no sweat easy to do cream puff more For Sheldon Cooper, adhering to social constructs was not simple . Adjective Easy to understand Privacy Policy In this project we are going to talk about the definition of Organizational Structures, its Importance, we will go deeper to present each type, state why, how and when they are used, their advantages and disadvantages, Features, Purpose, Factors for Designing them, the added value for using the organizational structures and at the end we will state our conclusion and recommendations. Its registration is quite simple and may be performed without many prison formalities. (ii) It may be difficult to achieve coordination between different departments because of their different orientations. The top management can easily evaluate the performance of different product divisions and pay greater attention to the product line which is less profitable as compared to others. 21 days ago. (vi) Since each product manager is required to supervise the diverse functions of production, sales and finance with respect to a particular product line, there is a wide scope for the training and development of all round executives. 6. Committee Organisational Structure Features: (a) Formed for managing certain problems/situations. 2023 EduBirdie.com. WebThis structure is simple and flexible, which makes it relatively easy to understand and to implement. Thus, matrix structure not only employs a multiple command but also related support mechanism and associated organizational culture and behaviour. The different organisational structures described above have their own advantages and disadvantages. Matrix structure is essentially a violation of unity of command and, therefore, whole classical concepts related to the principle of unity of command are violated. iv. Edubirdie. (iii) Product departmentation may sometimes lead to difficulties in coordination of certain specialised activities like marketing, financing and accounting. Strategic Business Unit (SBU) Structure, Types Organisation Structure With Advantages and Disadvantages, Types of Organization Structure Entrepreneurial, Functional, Divisional, Matrix, Team Based, Virtual and Boundary Less Structure, If such a culture is not established, team-based organization tends to perform poorer than hierarchy-based organization. Uploader Agreement. Activities related to a function are grouped in a single unit with a view to give a well-defined direction to the whole group. Laborers back in affiliation increase their support and move forward their will to work. Firstly, there may be lack of close control over manufacturing operations. clear, understandable; easy adj. It is significant to note that the organisation structure is directly related to the attainment of the organisational objectives. Thus, what is suitable for one business may not be suitable for a similar unit, but there are successful firms in a given industry tend to design structure in a similar way. Importance of Organization Culture. This is the reason why more and more organizations have put emphasis on creating self-managing teams. 1. Such organizations operate in a single product/service or very closely related products/services. A simple structure is a fundamental organizational structure that does not have different layers of management. There are different types of departmentation or organisational structure. Boundary less organizations use computer networks extensively. In matrix structure, a project manager is appointed to coordinate the activities of the project. iv. (v) Excessive specialisation may destroy teamwork in the organisation. A perfect example of this strategy is the military organization. iv. There are many ready made frameworks available for creating a static webpage. iii. Helps to maintain an intimate relationship with everybody in the organisation. The following are the importance of organizational structure: According to a study done by (n, 2018) there are 4 types: It is based on dividing the company into smaller groups with niche tasks or role, its similar to bureaucratic. Organization structure is the pattern in which various organizational activities are divided and assigned among positions, groups, departments, and divisions and the coordinating mechanism among these activities to achieve organizational objectives. Much research has been performed to determine whether organizational structure influences job performance and what relationship the two have. Functional Structure 3. Type # 1. These structures may be adopted on either/or basis or in hybrid form, that is, a part of the structure may be in one form while other part may be in another form which is quite common with large organizations. }rGcJ1h%1Ipht]P/`[t"S%73z.0bDw[ee=i~{`h0[wG97\7am97lQss,[nWO Functional design eliminates duplication. Similarly, matrix superior has to share the facilities with others. For example, GEC was earlier having nine product groups and forty-eight divisions which were reorganised into forty- three strategic business units, many of which crossed group, division, and profit centre lines. None of them is effective in certain situations. Convenient In addition to vertical communication, lateral and horizontal communications are quite common. iv. The word simple has many other senses as iv. The idea of this report is to analyze the retailer I have chosen how approaches its: Organizational Structure and Management, Marketing and Human resource management and, to discuss the different impacts the external business environment has and will have on the retailer. It deemphasises chain of control, span of control, and rigid departmentation. The first product of Apple was the Apple I (Deffree, 2019). In multi-product or multi-geographical area companies, divisions are created in the form of various strategic business units (SBUs). ii. Sharing of information between the constituents of the network organisation is usually facilitated by electronic technology such as cell phone, computer, electronic mail, fax, etc. He reports in a direct line to the up, but does not have a complete line of command below. The different structures, usually followed are explained below: Simple structure comprises owner (top level) and employees of lower level. It requires more persons with general management abilities. The operating divisions are relatively independent and consist of products and services that are different from those of the other divisions. Functional structure is based on specialisation of functions. The fundamental concept in SBU is to identify the independent product/market segments served by an organization, and creating SBUs accordingly. (iv) It is easier to evaluate and compare the performance of various product divisions. For example, marketing department may be classified and grouped into advertising sales, market research, and so on. It is the oldest and most common organisation structure. What are the advantages and disadvantages of organizational design? For instance, two divisions may have their separate marketing research wings or public relations departments. The specialisation increases operational efficiency, economic flexibility, and greater motivation to the people having attached with their area of speciality. 8. It helps in fast communication, since it is simple and informal, and. Depends on destinations and methodologies. This structure is used in large companies that work across several horizontal objectives. While growth through expansion of same line of business forces an organization to organize on functional basis, growth through geographic and product diversification necessitates the adoption of divisional structure. Organic structure represents low horizontal differentiation, low formalization, free communication, and participation by low-level members in decision-making. For instance, a big automobile servicing enterprise may organise its departments as follows heavy vehicle servicing division, car servicing division, and scooter servicing division. Second, creating self-managing teams is a long-drawn process full of anxiety and tension. Thus, the members cannot communicate across all levels of the organisation to obtain information. Our writers will provide you with an essay sample written from scratch: any topic, any deadline, any instructions. Each division has a number of branches at different places covered by the division concerned. Advantage: Operational Clarity. 21 days ago. Small-business proprietors ought to start considering a formal structure early within the development stage of their business. Mechanistic and Organic Structure. The SBU structure groups similar products, markets and/or technologies into homogeneous groups in order to achieve synergies. They plan, control, and improve their own work processes. In this type, each department has a boss or supervisor, with top down management hierarchy who supervise lower levels. Further, in large organizations, the basic organization structure may be supported by other forms for performing various activities like team-based organization, virtual organization, and boundary less organization. The thickness of these structures is very less as compared to its width and length. Cost and profit responsibilities may not be very clear in the matrix organisation. 5. This is the reason why more and more organizations are moving towards becoming boundary less organizations. They provide organisations with both freedom and control, whilst still enabling transparency and progression for employees. It is a set of planned relationships between groups of related functions and between physical factors and personnel required for the achievement of organisational goals. Other companies can do very well in those areas in which the first group of companies feels handicapped. There are many advantages to having a simple structured organization, some of which include: Increased leader control With no managers organizing work between the employees and a single leader, the owner of the organization has complete control Let us assume that a typical company has two divisions for metal products and cement respectively. Strategy formulation and its implementation functions are carried out almost by a single person as there is no scope for specialisation. For instance, three separate divisions in food preparation appliances were merged in a single SBU to serve house ware market. (iii) Project organisation requires specialists in various fields. Each unit is relatively self-contained in that it has the resources to operate independently of other divisions. A structure depends upon the associations objectives and strategy. There is a high degree of differentiation of functional tasks. Vertical communication between superior and subordinate is the tendency in mechanistic structure. It places attention and efforts on product lines and fixes responsibility for profits at the division level. Even though background plays an important role to be popular and admirable businessman, individuals leadership entrepreneurship abilities are a Introduction Apple Inc. (Apple) is an American multinational technology company established by Steve Jobs, Steve Wozniak and Ronald Wayne in 1976 (Biography, 2017). Center administration need to take on more of a support role to the choices made by the organization, rather than endeavoring to manage anything to workers. Question 1 Advantages of decentralised The advantages of a decentralised structure in relation to CBA are speed. iv. They may compete with each other in certain areas. v. It tends to encourage overspecialisation, narrowing viewpoints of key personnel and limit the development of general managers. 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