Divisional structure

A second organizational alternative is the divisional structure. It groups together people who work on the same product or process, severe similar customers are located in the same area or geographical region. Divisional structures are common in complex organizations with diverse operations that extend across many products ,territories , customers , and work processes

Advantages of divisional structures include:

More flexibility in responding to environmental changes Improved coordination across functional departments Clear points of responsibility for products or service delivery Expertise focused on specific customers, products and regions Greater ease in changing size by adding or deleting divisions.

Disadvantages of divisional structures.

They can reduce economies of scale and increase costs through the duplication of resources and efforts across divisions. They can also create unhealthy rivalries as divisions compete for resources and top management attention and as they emphasize division needs to the detriment of goals of the organization.

Type
Geographical

focus
Location of activity

example
President asian division& european division General manager, grocery products, drugs & toiletries

product

Good or service produced

continued
customer Customer or client serviced Agency administrator, problem youth & senior citizens Catalog sales manager, product purchasing & order fulfillment

process

Activities part of same process

Product structure
Groups together people and jobs working on a single product or service. They identify costs, profits, problems and successes in a market area. Managers are encouraged to be responsive to changing market demand and customer tastes.

Geographical structures
Groups together people and jobs performance in the same location they are typically used when there is a need to differentiate products or services in various locations, such as in different regions of a country.

Customer structure
Groups together people and jobs that serve the same customers or clients. This is a common form of structure for complex businesses in the consumer products industries its also called as market structures.

Process structure
Groups jobs and activities that are part of the same processes. Its a group of tasks related to one another that collectively creates something of value to a customer.

Matrix structures
It combines functional and divisional approaches to emphasis project or program teams its often called matrix organization

The matrix organization has gained a strong foothold in the work place, with applications in such diverse settings as manufacturing ( e.g., aerospace, electronics, pharmaceuticals), service industries (e.g., banking, brokerage, retailing)

continued
Professional fields (e.g., accounting, advertising, law) and the non profit sector (e.g., city, state and federal agencies, hospitals, universities) its also found in multinational corporations, where they offer the flexibility to deal with regional differences as well as multiple product, program, or project needs

Advantages

Better co operation Improved decision making Increased flexibility Better customer service Better performance Improved strategic management

Disadvantages

Susceptible Frustrating Time consuming Develop groupitis