14 Organizaton Structure Types Flashcards
Advantages of Functional Structure
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allows economy of scales - more efficeint if you do more if it
enables in-depth knowledge and skill development - really specialized people in one department
enables organizations to accomplish functional goals (e.g. creating best possible technology)
best with only some products - so many synergies are possible between products
Weaknesses of Functional Structure
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slow response to environmental changes, e.g. electromobility, automotive industry needs to change whole organization
may cause decisions to pile on top, hierarchy overload - no one has full responsibility, everyone somehow decided by CEO
poor horizontal coordination, everyone stuck in functional silos
less inovation, bc it would require whole organization
restricted view of goals - people in procurement not really interested in quality department
Strenghts of Divisional Structure
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suitable for fast environment change
-> leads to customer satisfaction
allows unit to adapt to differences in environment bc just can be organised differently
best in large / heterogenous organizations with sereval products
decentralizes decision making, more people fully responsible
involves high coordination
Weaknesses of Divisional Structure
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eliminates economy of sclaes in fucntional departments, bc everyone does their thing and not many synergies
poor coordination, might even get into competition, e.g. automotive industry
eliminates in-depth competence and technical specialization, bc spread across organization
integration and standartisation across product lines difficult - if products are similar, you loose possible synergies
Conditions of going from Functional do Divisional
1st Condition
sufficient size to justify seperate functions
2nd Condition
Heterogenous Portfolio that justifies specialization effects of seperation over company-wide synergies
if many synergies maybe not beneficial
if not, maybe beneficial to spread across diffferent production lenses
Matrix Structure / Oorganization, key aspects
two dominant lines
dual-authority structure to ensure balance between horizontal and vertical apsects
-> everyone basically has two bosses
Strenghts of Divisional Structure - Quick
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fast change in unstable environment
customer satisfaction
high coordination
units easily adapt to differences
best in heterogenous organizations
decentralizes decision making
Quick Strenghts - Functional Structure
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really specialized people in one department
economy of scales
accomplishment of functional goals
best with few products - synergies
Quick Weaknesses - Functional Structure
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slow change to environment
decisions could pile up on top - hierarchy overload
poor horizontal coordination
less innovation bc whole organization is needed for that
restricted view of goals - mostly own department
Quick Weaknesses of Divisional Structure
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elimination economy of scales - less synergies
poor coordination, even competition
eliminates in-depth knowledge
integration and standartisation hard
Quick Pros Matrix Structure
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coordination to meet dual demands
flexible sharing of human resources acrooss products
suited for complex decisions and unstable environment
promote functional and product skill development
best: medium sized with multiple products
Quick Cons Matrix Structure
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confusion bc of dual authority
needed: training and good interpersona skills
time consuming
participants need to work together effieciently
essential to maintain balance of power - avoid instability
