16465 organizational structure(2)

8/2/2019 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?

16465 organizational structure(2)

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