4 organisational structures
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OrganizationalOrganizationalOrganizationalOrganizational
StructuresStructuresStructuresStructures
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Information StructuresInformation StructuresInformation StructuresInformation Structures
Hierarchical
Network
Linear
Matrix
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Substitution ofSubstitution ofSubstitution ofSubstitution of
Information for HierarchyInformation for HierarchyInformation for HierarchyInformation for Hierarchy
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Functional StructureFunctional StructureFunctional StructureFunctional Structure
Individuals engaged in one functional activity are groupedinto one unit, such as HRM, Sales.
Advantages Makes efficient use of specialized resources Makes supervision easy
Disadvantages
Difficult to get quick decisions Difficult to determine accountability and judge
performance Coordination of the activities may be difficult
Chief Executive
Board of Directors
Production Marketing Accounts Personnel IT
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Divisional StructureDivisional StructureDivisional StructureDivisional Structure
Arranged around main products, services or customergroups. Can be further divided into either product orcustomer structures which enable staff to specialise inparticular product or customer group or geographic
structure where managers divide the organisationgeographically, usually according to location of customers.
Hewlett Packard
Imaging andPrinting Group
PersonalSystemsGroup
EnterpriseSystems Group
HP ServicesHP Financial
Services
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Organization by DivisionOrganization by DivisionOrganization by DivisionOrganization by Division Individuals engaged in one functional activity are
grouped into one unit. Advantages
Easy coordination and high performance
Speed of decision making is greater
Positive competition between divisions
Better control as each division can act as separateprofit centre and clear accountability
Disadvantages
Duplication of functions (e.g. different sales force foreach division) Negative effects of competition Lack of central control over each separate division
The interests of the division may be placed ahead ofgoals of organisation
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Organisation by AreaOrganisation by AreaOrganisation by AreaOrganisation by Area
Hewlett-Packards HeadquartersWorldwide
AmericasHouston, Texas
Europe, Middle East, AfricaGeneva, Switzerland
Asia PacificHong Kong
Hewlett Packard
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Organisation by AreaOrganisation by AreaOrganisation by AreaOrganisation by Area
Advantages
Serve local needsbetter
Positive competition More effective
communication
between firm andlocal customers
Disadvantages
Conflict between localand centralmanagement
Duplication ofresources andfunctions
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Matrix StructureMatrix StructureMatrix StructureMatrix Structure
A matrix or multidimensional organizationalstructure may have several structures at the
same time.
For example, an organization may have bothtraditional functional areas and major project
units.
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Matrix StructureMatrix StructureMatrix StructureMatrix Structure....
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Matrix StructureMatrix StructureMatrix StructureMatrix Structure....
Advantages Efficient means of
using specialised skills
Easy coordination work as a group
Flexibility andadaptability tochanging environment
Ability to understandeach others workload
Disadvantages Conflict between local
and central
management Need good
interpersonal skills
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Virtual OrganizationVirtual OrganizationVirtual OrganizationVirtual Organization
Temporary network of independentcompanies-suppliers, customers,competitors linked by information
technology to share skills, costs and accessto one anothers markets.
It will not have a central office, organizationchart or a hierarchy!!