Types of Organizational Structures

Question 1

HORIZONTAL

Answer 1

• Division of labour
• Jobs are grouped together into divisions
• Known as Departmentalization

Question 2

VERTICAL

Answer 2

• Authority relationships are established to ensure coordination.
  -Make sure everyone is working together and towards a common goal.

Question 3

What are the two types

Answer 3

1. Functional
2. Divisional
   Product
   Geographical
   Customer
   Process

Question 4

Functional

Answer 4

People with similar skills and performing similar tasks are formally grouped together into work units.
1. Marketing
2. Finance
3. HR
4. Accounting
5. Production etc.

Question 5

Divisional

Answer 5

Groups together people who work on the same product or process, serve similar customers and/or are located in the same area or geographical region.

Question 6

Product Structure

Answer 6

Group together jobs and activities working on a single product or service.
Managers are encouraged to be responsive to changing market demands and customer tastes.

Question 7

Types of divisional structures

Answer 7

Product Structure
Geographical Structure
Customer Structure
Process Structures

Question 8

Geographical

Answer 8

• Group together jobs and activities being performed in the same location or geographical region.
• This is used when there is a need to differentiate products or services in various locations.

Question 9

Customer

Answer 9

Group together jobs and activities that are serving the same customers or clients.

Question 10

Process

Answer 10

Groups together jobs and activities that are part of the same processes.

Question 11

Divisional Structures Advantages

Answer 11

• More flexibility in responding to change.
• Improved coordination across functional departments.
• Clear points of responsibility for product/service delivery.
• Expertise focused on specific customers, products and regions.
• Greater ease in changing size by adding/deleting divisions.

Question 12

Divisional Structures disadvantages

Answer 12

• Increase costs since resources and efforts may be duplicated in divisions.
• Creates unhealthy rivalries as divisions compete for resources and attention.
• Emphasize division goals to the detriment of the goals of the organization