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2.2 (2) DIFFERENT TYPES OF ORGANISATIONAL STRUCTURES (factors influencing…
2.2 (2) DIFFERENT TYPES OF ORGANISATIONAL STRUCTURES
PRODUCT
advantages
product division can work well because they allow a team to focus on a single product or service, with an appropriate leadership structure
having a senior executive - often a member of the Broad of Directors - makes it more likely the division will receive the resources it needs from the company
allow to build a common culture and
esprit de corps
that contributes both to higher morale and better knowledge of the division's range of products. this is preferable to having its product or service managed by multiple departments through the organisation
disadvantages
product division may compete with each other for available financial resources and this might reduce cooperation between them
division can result in compartmentalisation that result in lack of coordination or even duplication of developments. for example for example, Microsoft's business-software division developed the Social Connector in Microsoft Office Outlook 2010. they were unable to integrate Microsoft SharePoint and Windows Live until month after Social Connector could interface with MySpace and LinkedIn. Some experts suggested that Microsoft's divisional structure contributed to a situation where its own products were incompatible across internal business units
FUNCTION
advantages
grouping employees by functional skills, marketing can improve efficiency, specialised are cultured together, which promotes collaboration and the opportunity for the further development of professional expertise
employees can capitalise on their specialised skills as a means to move up the ladder in a given department
as each department specialises in a specific function, managers train and develop employees within their unit to be proficient in their given role
disadvantages
such a structure tends to suggest that one-way (top downwards) communication in the norm - this is rarely the most efficient form
there are few horizontal links between the departments, and this can lead to lack of coordination between them
managers are often accused of tunnel vision because they are not encouraged to look as problems in any way other than through the eyes of their own department. they can become too focused on departmental objectives and not overall corporate aims
this type of structure is very inflexible and often leads to change to resistance. this is because all managers tend to be defending both their own position in the hierarchy and the importance of their own department
REGION
advantages
communication between representatives can be very direct and personal in a geographical organisational structure - rather than having to establish working relationships with people on the other side of the world through email and telephone.
grouping employees into regional sections can encourage the formation of strong, collaborative teams that work effectively together and engage in planning and decision-making together
the ability to recruit local management offers companies the advantage of having leaders who are completely familiar with the local business environment, culture and legal climate
better decision can result from relying on the knowledge and experience of regional managers who are aware of specific cultural factors. Recruiting a mix of local and head-office managers to lead a geographical unit has the advantage of linking local culture with company culture. Customers can feel more at ease when speaking with local representatives who fully understand their language and idiomatic expressions
disadvantages
duplication of personnel between head office and regional office
conflict and unhealthy competition between different areas
it could make it more difficult to be consistent in core company beliefs - e.g. ethical code of practice - from one area to the next
inconsistent company strategies might be adopted in different regions as a result of poor coordination between regional offices
factors influencing organisational structure
the size of the business and the number of employees
the style of leadership and culture of management
corporate objectives
new technologies
economic recession
increased competition