Types Of Management Structures

Question 1

What is functional structure?

Answer 1

Functional structure involves grouping employees together according to the tasks or jobs they perform. e.g. Marketing, finance, operations, HR, R&D.

Question 2

What are the advantages of functional structure?

Answer 2

• defined career pathways for employees
• efficient use of resources
• possibility of high degree of task specialisation

Question 3

What are the disadvantages of functional structures?

Answer 3

• lack of flexibility and cooperation with different functions due to the bureaucratic nature
• increased competitiveness between functions to control resources, finance and HR; ‘empire building’ behaviour among personnel in each department.
• narrow departmental focus, as opposed to a broader organisation wide focus.

Question 4

What is divisional structure?

Answer 4

Divisional structure is grouping employees together according to divisions that may be geographical, customer, product or process focussed.

Question 5

What are the advantages of divisional structures?

Answer 5

• greater flexibility in adapting to environmental changes.
• easy pinpointing of responsibility for issues or problems
• direction of expertise at specific customers, products, regions or processes

Question 6

What are the disadvantages of divisional structures?

Answer 6

• reduced benefits of economies of scale because work could be duplicated
• potential to promote rivalry between divisions
• less technical depth and specialisation in divisions as each division has to focus on all objectives.

Question 7

What is the matrix structure?

Answer 7

Matrix structure groups employees together according to both functions they perform and the divisions to which they belong. This structure pools expertise across the organisation and creates work teams to undertake or solve specific problems.

Question 8

What are the advantages of matrix structure?

Answer 8

• increasingly efficient use of resources as resources are shared from functional and divisional sides.
• pooled expertise across organisation, creating best possible environment for problem solving and decision making.
• enhanced flexibility: operations can be altered quickly to suit environmental circumstances.
• enhanced communication, cooperation and teamwork

Question 9

What are the disadvantages of matrix structure?

Answer 9

• decisions made in project teams can sometimes undermine line authority
• creates potential for unity of command to be challenged, because workers may be reporting to multiple managers.