Functional divisional and matrix organizational structures. Organisational Structure: Functional Structure and Divisional Structure 2022-10-21
Functional divisional and matrix organizational structures Rating:
Functional and divisional organizational structures are two common approaches that companies use to structure their workforce. Both structures have their own benefits and drawbacks, and the right one for a company depends on its size, industry, and business goals.
Functional organizational structure is a traditional approach in which the company is divided into departments based on specific functions, such as marketing, finance, and operations. Each department is led by a functional manager who is responsible for the work and performance of their team. This structure is effective for small companies with a narrow product range and a relatively simple workflow. It allows for specialization and efficient use of resources, as employees can focus on their specific area of expertise. However, it can be inflexible and slow to adapt to change, as decisions often have to be made by higher-level managers and then filtered down to lower levels.
Divisional organizational structure is a more decentralized approach in which the company is divided into smaller, autonomous units or divisions. Each division is responsible for a specific product line or geographic region and is led by a divisional manager. This structure is better suited for larger companies with a diverse product range or operating in different geographic locations. It allows for more flexibility and adaptability, as divisions have the autonomy to make decisions and respond to local market conditions. However, it can also lead to duplication of efforts and a lack of coordination between divisions.
Matrix organizational structure is a hybrid approach that combines elements of both functional and divisional structures. In this structure, employees report to both a functional manager and a project manager. The functional manager is responsible for the day-to-day work and the development of the employees' skills, while the project manager is responsible for the project's timeline and budget. This structure is effective for companies that need to respond to changing market conditions and customer needs quickly. It allows for greater flexibility and coordination between departments, as employees can work on multiple projects and have access to resources from different functional areas. However, it can also lead to conflicting loyalties and communication issues.
In conclusion, functional, divisional, and matrix organizational structures are different approaches that companies use to structure their workforce. The right structure for a company depends on its size, industry, and business goals. Each structure has its own benefits and drawbacks, and companies may need to adapt their structure as they grow and change.
Four Types of Organizational Charts: Functional Top
Each division than has it own functional structure like IT and marketing. A particular type of organizational structure may not be the best structure for as long as an organization exists, and an appropriate organization structure is achieved through strategic evaluation and re-evaluation of tasks and employee groupings. Customer Based Structure 12. A major disadvantage of this system is that there is no clear way to reach an agreement in case of employees disagree over something because of lack of management figures. It is a system that is said to be more productive and encourages all the members of the organizations to take part in the decision-making process.
A Planning Tool You can also use an org chart for planning purposes. In the boundary less organization, vertical boundaries are removed through flattening of organizational hierarchy. This matrix requires the project manager to speak with each functional manager. If you look at this diagram of a functional structure, you can see how departments, such as sales and marketing, finance and accounting, customer service, human resources, design and build, and maintenance, are grouped according to their specialization. However, leaders have to be open to moving to a more suitable arrangement if the business starts to grow or if the overall function of the business changes. It requires more persons with general management abilities. Product Based Structure: The departmentation by product places all the responsibility and authority under one manager to get the product or service produced and marketed.
Organisational structures: Functional, Divisional, Matrix, and Line and Staff
The divisional model does not necessary origin from a functional configuration Rumelt, 1974 , but it can happen, mostly in the mature stage of the company lifecycle ed. For building the project team, personnel are drawn both from the functional departments of organisation and from outside. Most functional teams are good at many things but great at nothing. What Is a Functional Organization? Benefits An ideal OS helps in the efficient operation of a company. The basic difference between a team and a group is in three contexts- job categories—group has many narrow job categories and team has one or two broad categories; authority—group is directly controlled by the immediate superior and team has its own control mechanism; and reward system—reward in group system depends on individual performance and seniority and reward in team system is based on team performance and individual breadth of skills. The activities or functions of all these departments are coordinated by the chief executive of the organization. In can be termed as a mix of both functional structure as well as divisional organizational structure.
Functional and Divisional Organizational Structures
. He may or may not be specialized in each area. The division can be made responsible for volume of business and profitability. The synergistic effect is generated in virtual organization because of the complementarity of competences of different partners. How Do Matrix Organizations Work? A higher workload may lead to a decrease in work satisfaction, increased staff turnover, and a rise in stress and burnout. Many educational institutions usually follow this type of departmentation. Helps individual businesses respond to the changes in external environment, iv.
Different Types Of Organizational Structures In Organizations
In many cases, teams created with a matrix organizational structure are stronger than those formed just using a functional approach due to the resulting diversity. Informal communication plays a bigger role. Duplication of Activities: Similar types of activities performed in all divisions leads to duplication of work and increased expenditure. This situation means there is no uncertainty about who is responsible for a task. This confusion might cause some employees to question which boss is in charge.
As said above, product based structure is suitable only for fairly large organisations having multi-product lines and which can appoint top managerial personnel to handle semi-autonomous product divisions. To calculate a determinant you need to do the following steps. Answer Some definable organisational structures are commonly seen across business - there are advantages and disadvantages to each. A functional design may be effective when an organization has a narrow product line, competes in a stable environment, pursues a low-cost or focused business strategy, and does not have to respond to the pressures of serving difficult types of customers. Types of Organisation Structure — In Relation to the Attainment of the Organisational Objectives An organisation structure shows the authority and responsibility relationships between the various positions in the organisation by showing who reports to whom.
Customer Based Structure : Departmentation by customer may be followed in enterprises engaged in providing specialised services to different classes of customers. Professional growth for employees With the matrix organizational structure, workers are more likely to pursue professional growth opportunities and progress in careers. We provide new and fresh best business ideas that make money every day in our comprehensive posts. Further, the divisions may also try to maximize their profits at the cost of other divisions. Through these networks, people of boundary less organizations communicate across intra-organizational and extra-organizational boundaries. It may take the form of combining product and geographical divisions or functional and divisional structures, operating in tandem. Also, the divisional head of each division is responsible for the profit or loss of his division so that each division acts as a profit centre.
Organisational Structure: Functional Structure and Divisional Structure
ADVERTISEMENTS: Additionally, learn about the advantages, disadvantages, merits and demerits of few types of organisation structure. Wearing multiple hats is common in small companies, but it can affect day-to-day operations and overall performance in larger organizations. Career patterns and professional development in specialised area. If there are too many divisions, coordination becomes complex and difficult. Hindrance in Organisational Objectives: Under functional structure, more emphasis is given on achieving of departmental objectives rather than the overall organisational objectives.
This form of departmentalization of skills ensures that work provided to a department is handled in a very productive manner as the employees have good knowledge, and practical abilities specific to their domain. The prospect of having to report to multiple bosses may give rise to confusion and complexity within the organization. Thus the selection of organization structure should be made with care. Matrix Organizational Structure This type of organizational structure is more complex than the previous two. The managers in the central organisation spend most of their time coordinating and controlling external relations. Further, matrix structures can be used to serve global customers by integrating business functions and responding to customer demands fast. Therefore, some people tend to call it T-form technology-based organization.