Organisation structure Flashcards
(14 cards)
Functional Structure
-Oldest organization type in the development history of industrial enterprises
-Persons with similar abilities and tasks are divided into formal work units, which can
be found in the second hierarchy level below the top management
Functional Structure : advantages
- Chief Executive in touch with all operations
- Simplifies / reduces control mechanisms
- Clear definition of responsibilities
- Concentration of expertise
- Specialist in senior and middle management
Functional Structure : disadvantages
- Senior managers overnurdened with routine matters
- Strategic issues neglected by senior managers
- Coping with diversity is difficult
- Failure to adapt
- Coordination between function difficult
Multidivisional Structure
–> operate as mini company each division
Multidivisional Structure: advantages
- Flexible
- Control by performance
- Ownership of strategy
- Specialization of competences
- Training in strategic view
Multidivisional Structure: disadvantages
- Duplication of functions
- Fragmentation and non cooperation
- Danger of loss of central control
Multinational Structure
Local independence: how much do you have to adapt your organization structure to the local country
Multinational Structure: schema
Local independence & responsiveness : horizontal
Global coordination: vertical
- Low/Low: International division (small scale entry)
- High/Low: Local Subsidiary (Geographic divisional structure)
- Low/High : Global Product Divisions (economies of scale)
- High/High : Transnational Structure : Global network with knowledge sharing
Matrix Structure
combine the geography aspect and the different divisions
Advantages of Matrix structures
- Integrate knowledge
- Flexible
- Allow dual dimensions
Disadvantages of Matrix structures
- High degrees of conflict
- Length of time to take decision
- Unclear Responsibilities (for job and tasks/ for cost and profit)
Project-based Structures
employees and resources are assembled into this project
= Once this project is completed –> the structure is broken up again to free up employees and resources
= might be for good companies that are based on big projects
Project-based Structures: Advantages
- High flexible
- Effective knowledge exchange
- Accountability and control
Project–based Structure: Disadvantages
- Hinders accumulation of knowledge
- Often ill coordinated –> very hard to build competencies and spread them across the organisation
