In: Business and Management

Submitted By lucechicharito
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5 Focuses of Organizational Structure – Strengths and Weaknesses
Description: A look at the basic ways to structure an organization with their respective strengths and weaknesses
5 Focuses of Organizational Structure – Strengths and Weaknesses
1. Functional Structure
Easier to manage work within a group
Coordination and communication between departments may be slower and less accurate

Contains people who “speak the same language” and nurtures technical expertise, attracts and develops experts

Individual department managers have limited decision making authority

Lower labor costs; workload can be balanced upon demand
Different departments have different priorities; resolving conflicts may be costly; customers’ interests could be overlooked

2. Product or Service-Based Structure
Responsibility for each product can be pinpointed at the division level

Less sharing of resources across divisions
Focus on one product can produce higher quality “state-of-the-art” output

More duplication of effort resulting in higher costs
Team spirit develops around each product line;
Competition among divisions can boost business
Customers who want more than one product/service will have to work with more than one division

Encourages independent decision making;
Quicker response to customer request
Company may be slow to recognize that a product should be changed, dropped or added

Could be stifled by one product focus 3. Customer or Geography-Based Structure
Unique needs of each type of customer are well served
May be less sharing of resources across division/departmental boundaries

Focus on customers’ needs and preferences
More duplication of effort and infrastructure resulting in higher costs

Unprofitable product lines more likely to be dropped
Internal systems…...

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