Product, Customer and Geographical structures

[Einstein]

Can someone provide me with some advantages and disadvantages (specifically or broadly) for these type of structures. We use essential Bm and the teacher nor the book have explained it well.

Thanks

[Einstein]

bump

[PsychoT]

bump

Hey mate, watch this video: http://teachingbubble.com/vce-business-management-unit-3-outcome-2

Should list the advantages and disadvantages in there, great website as well for each section of Business!

[chikedi]

Im also using the essential book and am finding it helpful. Chapter 4 explains it well. here are my summary notes for it. there are also diagrams in ch4
Types of hierarchical structure:
1.   Functional structure
A  form of traditional organisational structure that is  based on the functions performed. Applies to most organisations
Advantages:
-Specific goals- clear about the objectives
-Specialised knowledge support
-Unity of command- better clarity
Disadvantages:
-Communication is one way and it takes longer
-Does not encourage cross-functional teamwork
-Employees could be disengaged due to centralised decision making

 


2. Divisional structure
i.   Geographical-multinational: Structure based on divisions according to location. Applies to multinational organisations. Advantages: More coverage and focus. Better to serve multinational organisations. Disadvantages: Four different marketing functions.
 

ii.   Product based-multiproduct: Departments where employees are grouped together according to the product they have to make or sell. Apples to a company starting a new product. Eg. Retail departments, such as IKEA, with multiple departments like ‘furniture’, ‘accessories’, ‘Sporting goods’. Advantages:  Good for expanding product based structure.
 


iii.   Customer based-personal and business: departments based on the type of customers dealt with by employees. Applies to a company aiming at a new product. Eg. Car dealerships and Banks with business and personal customers who have different needs. Advantages: Allows better customer focus.
 

Matrix structure
A structure that places managers and employees into project teams that cut across functional or department lines, and requires them to both functional and task management.  Mainly project based (gaming companies, movie organisations, building companies). Have a dual reporting system.
Advantages: flexibility uses existing resources, cross-functional teams help communicate and involve teamwork, and employees get multi-skilled. 
Disadvantages: two bosses could create conflict of interest, difficult to manage, need to keep reassigning people, more training required for employees.

Network structure
Virtual organisation where functions are outsourced to other organisations. The business does something their good at and outsources everything else (eg. fashion house).
Advantages: Cost reduction, focus on expertise
Disadvantages: outsourcing overseas means less jobs, loose control.