Name: Pham Tran Thuy An

Student Code: 11204227

INDIVIDUAL ASSIGNMENT

Why does a firm need organizational structure?  Please illustrate your arguments
by real-life examples?

Having a proper structure is very important for an organization. A structure is an

important factor when it comes to the company’s success, growth and profit. It gives
clear goals and makes sure that responsibilities are clearly defined. I believe that every
firm do need organizational structure because:
1. An organization structure defines how certain activities are directed to achieve the
goals of an organization. It expresses each employee's job and how it fit in with the whole
system. A proper organizational structure is important for the completion of any project.
It can help in identifying the talent available and the scope of that talent.
2. The structure not only defines a company’s orders but also allows it to arrange salary
payment for employees. By putting the organizational structure in place, the firm can
decide salary grades and ranges for each position.
3. Organizational structure also makes operation system more efficient and effective. By
separating employees and functions into different departments, the company can perform
different operations at once It is necessary to have the correct person in the right position.
Example: In the global market, Starbucks has three major divisions: 1. America, 2.
Europe, Middle East, Russia and Africa and 3. China and Asia-Pacific. Each division has
a vice president. This way, each manager answers to two superior managers, the
geographic head, and the functional head. Moreover, in the divisional structure, the firm’s
division is also product wise. Starbucks produces several products now including coffee,
canned products, merchandise, bakery products and soon. Starbucks has teams at the
lower level. For example, in their cafes, they have teams to make products and deliver
them.
4. Moreover, if structure is defined, company employees will surely have a clear
communication. Example: They would know who to report to and they would have clear
lines of communication in mind.
5. Last but not least, successful organization structure helps company’s needs meet each
other. The main goal for anyone would be meeting the goals defined by a company for
that company’s success. A company would want it’s functioning to be smooth and this
will only be achieved if structures are well defined.