Divisional structure

A second organizational alternative is the divisional structure.

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It groups together people who work on the same product or
process, severe similar customers are located in the same
area or geographical region. Divisional structures are
common in complex organizations with diverse operations
that extend across many products ,territories , customers ,
and work processes
Advantages of divisional
structures include:
 More flexibility in responding to
environmental changes
 Improved coordination across functional
departments
 Clear points of responsibility for products or
service delivery
 Expertise focused on specific customers,
products and regions
 Greater ease in changing size by adding or
deleting divisions.
Disadvantages of divisional
structures.
 They can reduce economies of scale and
increase costs through the duplication of
resources and efforts across divisions.
 They can also create unhealthy rivalries as
divisions compete for resources and top
management attention and as they
emphasize division needs to the detriment of
goals of the organization.
Type focus example
Geographical Location of President asian
activity division&
european
division

product Good or General

service manager,
produced grocery
products,
drugs &
toiletries
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customer Customer or Agency
client serviced administrator,
problem youth
& senior
citizens

process Activities part Catalog sales

of same manager,
process product
purchasing &
order
fulfillment
Product structure
Groups together people and jobs working
on a single product or service. They
identify costs, profits, problems and
successes in a market area. Managers
are encouraged to be responsive to
changing market demand and customer
tastes.
Geographical structures
Groups together people and jobs
performance in the same location they
are typically used when there is a need
to differentiate products or services in
various locations, such as in different
regions of a country.
Customer structure
Groups together people and jobs that
serve the same customers or clients.
This is a common form of structure for
complex businesses in the consumer
products industries its also called as
market structures.
Process structure
Groups jobs and activities that are part of
the same processes. It’s a group of
tasks related to one another that
collectively creates something of value
to a customer.
Matrix structures

It combines functional
Click to add and
Textdivisional
approaches to emphasis project or
program teams its often called matrix
organization
The matrix organization has gained a
strong foothold in the work place, with
applications in such diverse settings as
manufacturing ( e.g., aerospace,
electronics, pharmaceuticals), service
industries (e.g., banking, brokerage,
retailing)
continued
Professional fields (e.g., accounting,
advertising, law) and the non profit
sector (e.g., city, state and federal
agencies, hospitals, universities) its also
found in multinational corporations,
where they offer the flexibility to deal
with regional differences as well as
multiple product, program, or project
needs
Advantages
 Better co operation
 Improved decision making
 Increased flexibility
 Better customer service
 Better performance
 Improved strategic management
Disadvantages

 Susceptible
 Frustrating
 Time consuming
 Develop “ groupitis”