Organization Effectiveness Module 4 - Organization Structure Flashcards
What are the different organizational structures?
Functional Departmentalization Product Departmentalization Customer Departmentalization Geographic Departmentalization Matrix Departmentalization Boundaryless
What is functional departmentalization?
Organizes work along specific functions. This is the most common and traditional organizational structure.
What are the advantages of functional departmentalization?
- Specialty focus increases expertise
- Centralized control is more efficient
- Internal communication is easy
- Mentoring is available
What are the disadvantages of functional departmentalization?
- Cross-functional communication may be challenging
- Common understanding is less strong
- Collaboration requires compromise
- Decisions may take longer
What is product departmentalization?
Managers are responsible for an entire product line and its facets instead of specific functions.
What are the advantages of product departmentalization?
- Responsible for whole process
- Easy to implement cross-functional process improvements
- Easy access to resources
- Decision making is faster
What are the disadvantages of product departmentalization?
- Duplication of effort
- More expensive
- Less cross-departmental collaboration
- More focus on one product line vs the whole organization
What is customer departmentalization?
Divided by customers/clients, focus on gaining customer intimacy and know the customer inside and out.
What are the advantages of customer departmentalization?
- Focus on customer satisfaction
- Products can be customized to meet customer needs
- Easy access to resources
- Decision making is faster
What are the disadvantages of customer departmentalization?
- Duplication of effort
- More expensive
- Less cross-departmental collaboration
- Customer needs may be met at the expense of the whole company
What is geographic departmentalization?
Organization is divided based on geographical areas or markets.
What are the advantages of geographic departmentalization?
- Physically close to the customer
- More in tune with unique customer needs based on location
- Decreased need for business travel
- Decision making is faster
What are the disadvantages of geographic departmentalization?
- Duplication of effort
- More expensive
- Less cross-geographic collaboration
What is matrix departmentalization?
Combination of functional departmentalization and another structure resulting in people reporting to two bosses one functional and one from the other structure.
What are the advantages of matrix departmentalization?
- Efficient management of large organizations
- Greater collaboration across areas
- Centralized control
- Avoids duplication
What are the disadvantages of matrix departmentalization?
- Conflict
- Confusion
- Higher level of management skill required
What is a boundaryless organization?
An organization that recognizes their need to be flexible and reduces boundaries internally and externally.
What are the advantages of a boundaryless organization?
- Emphasizes shared interests across boundaries
- Greater use of teams
- Encourages innovation
- Communication flows freely
What are the disadvantages of a boundaryless organization?
- Confusion and duplication
- Difficult to overcome political boundaries
- Higher level of management skill required
What are the type of organizational boundaries?
- Vertical between levels
- Horizontal between departments
- External between organization and customers/suppliers/others
- Geographic between locations/cultures/markets
What are some symptoms of organization design problems?
Bad job design Bad structural design Ineffective spans of control Insufficient sharing of information Duplication of effort Conflict between departments Too many committees
