Matrix Organizational Structure. The divisional structure alludes to organizations that structure initiative as per diverse items or tasks. Let's take a look at the advantages and disadvantages of each so you know what you're up against when you join a new structure. Functional Vs. Divisional Organizational Structure. An organization is the result of the organizing process and can be defined as a structured grouping of people working together to achieve organizational objectives. Your business and its needs also impact whether one type of organizational structure is better suited for your business than the other, or whether you should consider a different organizational structure for your company. The organizational structure can be classified under following two types: ADVERTISEMENTS: 1. Companies need to employ more managers and employees when using this type of organizational structure. They may also place multiple demands on people, thereby creating stress. 5 Advantages and Disadvantages of the Matrix Organizational Structure November 23, 2020 When a business initiates a project, it can be crucial to have an organizational structure in place to define all the aspects of the project. Often, organizations will divide the company into various product departments; however, since my company was in … Potential advantages of divisional structures: More flexibility in responding to environmental changes Improved coordination across functional areas Clear points of responsibility Expertise focused on specific customers, products, and regions Greater ease in restructuring 7. Advantages Committee Organization Structure :- • Pools up the organisational resources in terms of knowledge skills and experience • Coordinating plans as well as in facilitating their execution. There’s the more traditional functional structure, the divisional structure, the matrix structure and the flatarchy structure. 7. Companies are divided into departments of specialization, and then within those units, they are separated further into projects and products. The advantages of divisional structure include flexibility in terms of usage of product structure, geographical structure and market structure depending upon the need of the organization. Hybrid Organisational Structure: Exhibit 10.9 (a) illustrates the hybrid organisational structure. It simply states who works for who. While Gap is the organization, there are three unique retailers underneath the heading: Gap, Old Navy, and Banana Republic. The main difference between functional and divisional structure is that in functional organization is described as an organizational structure wherein, the employees are classified on the basis of their area of specialization. 1 Every organization must choose an overall structure that meets its needs best and allows interactions among individuals and departments to attain the its goals. Fast Decisional Making. The divisional organizational structure is characterized by centralized decision-making and decentralized management. There are three main types of organizational structure: functional structure, divisional structure and a blend of the two, called matrix structure. This approach makes it much easier to assign responsibility for actions and results. Divisional Structure. Functional Organization : All of the companies define its organizational structure to determine the reporting relationships that will exist in the company. Flexibility. The major disadvantage of using charts and graphs is that these aids may oversimplify data, which can provide a misleading view of the data. As with all organizational structure types, the divisional structure offers distinct advantages and disadvantages. Consequently, labour expenses can be higher. For example, the person heading the IT department will have the education and skill necessary to shoulder this responsibility and successfully run his team. The divisional structure is a type of organizational structure that groups each organizational function into a division. Functional expertise and efficiency. Each division gets adequate freedom. Chron.com, 03 June 2010. Advantages of divisional organizational structure Easy to grow General manager with wide point of view. Also learn about its advantages and disadvantages! The article is a review of the literature on the key advantages and disadvantages of matrix organizational structures. Functional Organizational Structure In a functional organization structure, the project manager and all the resources work in the same company division, such as the sales and marketing department. Two common organizational structures are multi-divisional and matrix. More advantages and disadvantages of divisional structures, as well as its contingencies, are cited below. Functional Structure is one in which the reporting relationships of the organization are bifurcated according to their functional area. An organizational structure, so designed that it is bifurcated into semi-autonomous divisions on the basis of product, service, market etc, is known as divisional structure. Advantages of the divisional approach are: - 1. The divisional structure can be useful because it affords the company greater operational flexibility. Disadvantages Committee Organization Structure :- • It Is An … A divisional organizational structure breaks the company down into units that are self-contained and generally independent from one another. Each has its inherent advantages and disadvantages. Different organizational structures that combine to form Starbuck’s matrix structure are divisional structure, functional structure, and team-based structure. We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. An organizational structure wherein the organizational functions are classified into divisions as per product or service lines, a market is called Divisional Structure. The advantages of divisional structure are explained below: Accountability: The divisional organizational structure makes it possible to account in isolation for each division of a company. 3. It is a type of organizational structure that groups each organizational function into a division. Some of the advantages and disadvantages of a Divisional organizational structure are as follows. In other words, it combines decentralized management with independent accounting and allocates responsibility and authority to each division to a maximum degree, thus enabling the top leaders to get rid of daily production operations to become a truly powerful decision-making body. Divisional structures developed from the traditional functional structure, which features departments built on related work tasks, such as marketing. The matrix structure followed by Starbucks coffee is one of the best organizational structure examples. Advantages of a Divisional Structure. What are the disadvantages of using a chart? DISADVANTAGE OF DIVISIONAL STRUCTURE Each … Advantages: 1. Generally speaking, divisions work best for companies with wide variance in product offerings or regions of geographic operation. 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