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Org Structure

The document discusses different organizational structures including simple, functional, divisional, and matrix structures. It provides examples of each structure and how companies like Starbucks have implemented a matrix structure to support their goals.

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13 views

Org Structure

The document discusses different organizational structures including simple, functional, divisional, and matrix structures. It provides examples of each structure and how companies like Starbucks have implemented a matrix structure to support their goals.

Uploaded by

wqg8j5bwj2
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Simple Structure: In this structure, the owner-manager controls all activities and makes

all the decisions. This structure may be appropriate for small and young organisations.
Coordination of tasks is done through direct supervision. There is little specialization of
tasks, few rules and regulations and communication is informal.
Figure 11.1: Simple Structure

Owner-Manager

Employees
Figure 11.2: Functional Structure

CEO

Manufacturing Marketing Finance Human Resources R&D

Example: Small business with one product line could start making the components
it requires for production of its products instead of procuring it from an external
organization. It is not only beneficial for organization but also for employees' faiths.
3 Divisional Structure: Divisional structures are used by diversified organisations. In a
divisional structure, divisions are created as self-contained units with separate functional
departments for each division. A division may be organised around geographic area,
products, customers etc. The head office determines corporate strategy, allocates resources
among divisions and appoints and rewards the heads of these divisions. Each division is
responsible for product, market and financial objectives for the division as well as their
division's contribution to overallcorporate performance.
Figure 11.3: Divisional Structure

CEO

Division1 Division2 Division 3

Same as Same as
Manufacturing Marketing Finance HR
Division1 Division 1

Example: Divisions can be categorized from different points of view. One might
make distinctions on a geographical basis (a US division and an EU division, for example)
or on product/service basis (different products for different customers: households or
companies). In another example, an automobile company with a divisional structure
might have one division for SUVs, another division for subcompact cars, and another
division for sedans.
Figure 11.4: Matrix Structure
Matrix Structure

Top Management

Manufactuing Sales Finance Personnel

Manager Manufacturing Sales Finance Personnel


Project A Unit Unit Unit Unit

Personnel
Manager
Project B Manufacturing
Unit
Sales
Unit
ance Unit

Manager Manufacturing Sales Finance Personnel


Project C Unit Unit Unit Unit

Manager Sales Finance Personnel


Manufacturing
Project D Unit Unit Unit Unit

While functional heads have vertical control over the functional managers, the product or
project heads have horizontal control over them. Thus, matrix structure provides a dual
reporting. The dual lines of authority makes the matrix structure unique. The matrix
structure has been used successfully by companies such as IBM, Unilever, Ford Motor
Company etc.

Example: Starbucks is one of the numerous large organizations that successfully


developed the matrix structure supporting their focused strategy. Its design combines
functional and product based divisions, with employees reporting to two heads. Creating
a team spirit, the company empowers employees to make their own decisions and train
them to develop both hard and soft skills. That makes Starbucks one of the best at customer
service.

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