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Building organization structure - Coggle Diagram
Building organization structure
Hierarchy vs self-organisation
Franchisee
Disadvantages
Not really your own idea
Lack of real independence
Franchisor makes the rules
Can be expensive to buy-in
Royalties can be high
Goodwill you build up dependent upon continuing franchise agreement; may be problems if you wish to sell
Franchisor can damage brand
Advantages
Format proved; less risk of failure
Easier to finance than own start-up
Established format; quicker to start-up
Training & support from franchisor
National branding should help sales
Economies of scale may apply
Organic structures within organic structure
Organizational hierarchy
Organizational matrix
Organic multi-functional project teams
Mixed organic / hierarchical structure
Organic head office with subsidiaries, divisions & departments
Control vs autonomy
Network structures
Crowdsourcing & open innovation
Down-scoping & outsourcing
Partnerships
Strategic alliances
Joint ventures
Franchisor
Advantages
Way of expanding business quickly
Financing costs shared with franchisees
Franchisees usually highly motivated since their livelihood depends on success
Disadvantages
British Franchise Association rules take time and money to comply with
Loss of some control to franchisees
Franchisees can influence the business
Failure of franchisee can reflect on franchise
May be obligations to franchisee in the legal agreement
Entrepreneurial structure
Structure depends on many things - nature of the organization, its strategies, the tasks undertaken, the culture it wishes to encourage, its size & its environment
Entrepreneurial organizations typically face a high degree of environmental turbulence. If tasks are complex, they are best served with an organic structure that may change in different situations
A large multi-business is likely to have a hybrid structure with relatively autonomous operating divisions or subsidiaries reflecting different needs, some having more traditional internal structures, linked to head office through an organic structure with entrepreneurial architecture
Control in the organic structure will be loose (or at least balanced) giving people autonomy but holding them accountable. It will have a strong organizational culture & will have a wide range of external partnerships
There will be structures to provide resources for new venture activity & spin-offs will not be uncommon
