organisational structures

Question 1

Matrix structure

Answer 1

• Combines elements of functional and project-based organizational structures.
• Employees often report to more than one boss and are situated in cross-functional teams.
• Matrix structures are commonly found in industries where projects require diverse expertise, rapid adaptation, and collaboration across functional areas.
  companies that benefit:
  TECH COMPANIES:
• innovation is key
• allows for cross-functional teams to work on projects e.g. Google: engineers from different departments collab on various projects.
• enables pooling diverse skills, fostering innovation, and adapting to technological advancements.
  PROJECT-BASED INDUSTRIES:
• construction companies managing large-scale projects
  engineers, architects & contractors work together on a project ensuring efficient coordination and integration of different expertise for successful project delivery.
  BENEFITS:
• enhances collaborations: teams with diverse expertise collab, fostering innovation and problem-solving.
• efficient utilization of specialized skills across projects or functions.
• knowledge sharing
  CHALLANGES:
• complex communication: reporting to multiple managers can cause confusion or conflicts in priorities
• conflicts may arise between functional managers and project managers over resource allocations and authorities

Question 2

functional structure

Answer 2

• Functional structures are advantageous for organizations that emphasize specialization, efficiency within specific departments, and clear career paths
• Structure that groups activities and people, from the bottom to the top, according to the similarities in their work, profession, expertise, and resources;
  e.g. Human Resource Management, Marketing, Operations;

COMPANIES THAT BENEFIT:
1)MANUFACTURING COMPANIES:
- A functional structure = division based on expertise. e.g. Toyota- employs a functional structure - ensure each department focuses on its specializes tasks.
2) LARGE CORPORATIONS WITH DIVERSE PRODUCT LINES:
- companies with varied product lines. each division operates independently under its functional area = focused expertise, efficient management…

ADVANTAGES:
It allows individuals to be grouped based on their specialism & technical expertise (facilitates each function & career development)
CHALLENGES:
Inequalities in resource allocation can cause dysfunctions and feelings of rivalry among employees
Creates Homogenous teams (less innovative)

Question 3

divisional structure:

Answer 3

• Divisional structures are beneficial for organizations with diverse product lines, geographical locations, or customer segments
• structure splits an organization up into self-contained entities based on the organizational outputs, such as products or services; geography; and market orientation;

COMPANIES THAT BENEFIT:
1)RETAIL LINES WITH MULTIPLE LOCATIONS e.g. Walmart:
- allows adaption to local market demands and customer preferences
- allows them to address diverse needs across various locations effectively

ADVANTAGES:
Clear focus on market segment helps meet customers’ needs – diversified range of products
Positive competition between divisions
Better control as each division can act as a separate profit centre

DISADVANTAGES:
Duplication of functions (e.g. different sales force for each division)
Negative effects of competition
Lack of central control over each separate division
Divisions can become too autonomous