divisional organizational structure: advantages and disadvantages

Hole Inc. is an ideal case of this. Consequently, labour expenses can be higher. The key points in favor of the divisional structure involve placing decision making as close to the customer as possible. Adaptability and flexibility in divisions. Potential advantages of divisional structures: More flexibility in responding to environmental changes Improved coordination across functional areas Clear points of responsibility Expertise focused on specific customers, products, and regions Greater ease in restructuring 7. For example, the person heading the IT department will have the education and skill necessary to shoulder this responsibility and successfully run his team. Divisional Structure. As with all organizational structure types, the divisional structure offers distinct advantages and disadvantages. Exhibit 10.9 (b) illustrates a combination structure. By pulling resources from these departments to devote to a specific product, location or customer, the divisional organizational structure gains some advantages the functional structure lacks. He has written hundreds of articles for newspapers and the Internet on a variety of topics, including several on golf for GolfLink.com. Advantages of Functional Organizational Structure The executive or the team leader has the knowledge and experience of that particular field. Generally speaking, divisions work best for companies with wide variance in product offerings or regions of geographic operation. Generally speaking, divisions work best for companies with wide variance in product offerings or regions of geographic operation. 7. Advantages Committee Organization Structure :- • Pools up the organisational resources in terms of knowledge skills and experience • Coordinating plans as well as in facilitating their execution. Disadvantages: 1. Functional Structure is one in which the reporting relationships of the organization are bifurcated according to their functional area. They may also place multiple demands on people, thereby creating stress. There’s the more traditional functional structure, the divisional structure, the matrix structure and the flatarchy structure. What are the disadvantages of using a chart? The advantages are: Accountability. The matrix structure can get a bit confusing. The advantages of divisional structure are explained below: Accountability: The divisional organizational structure makes it possible to account in isolation for each division of a company. You can change your ad preferences anytime. After providing a brief introduction into the discipline, it identifies and discusses eight major characteristics of matrix organizations. 2. The advantages of divisional structure include flexibility in terms of usage of product structure, geographical structure and market structure depending upon the need of the organization. Let's take a look at the advantages and disadvantages of each so you know what you're up against when you join a new structure. ...Advantages & Disadvantages of Divisional Organizational Structure X Chris Joseph is a freelance writer residing in Pennsylvania. Flexibility. Functional Organization : All of the companies define its organizational structure to determine the reporting relationships that will exist in the company. Chron.com, 03 June 2010. The divisional organizational structure is characterized by centralized decision-making and decentralized management. Divisions facilitate quick responses to external changes like natural disasters, financial crises or weather changes. ADVANTAGE OF DIVISIONAL STRUCTURE Product specialisation. Also, you can check out the advantages and disadvantages of organizational structure to know more about it. Your business and its needs also impact whether one type of organizational structure is better suited for your business than the other, or whether you should consider a different organizational structure for your company. Two common organizational structures are multi-divisional and matrix. The structures may promote allegiance to department rather than organization objectives. One person, alone, can start and run a small business, but when two or more people come together to accomplish a business goal, an organization is formed. Functional Organizational Structure In a functional organization structure, the project manager and all the resources work in the same company division, such as the sales and marketing department. This approach makes it much easier to assign responsibility for actions and results. Advantages of a Divisional Structure. Hybrid Organisational Structure: Exhibit 10.9 (a) illustrates the hybrid organisational structure. It is a type of organizational structure that groups each organizational function into a division. Pros or advantages of divisional structure: Each division can work as an independent unit. The disadvantage includes higher costs associated with maintenance of such structures. Matrix Organizational Structure. Advantages of divisional organizational structure Easy to grow General manager with wide point of view. Each division gets adequate freedom. Functional Structure Advantages, Disadvantages, and Contingencies of Divisional Structures Advantages Each organizational structure comes with different advantages and disadvantages and may only work for companies or organizations in certain situations or at certain points in their life cycles. Advantages and Disadvantages of Functional Organizational Structure In this type of organization, the emphasis is on managing some functions wherever the function may be performed in the enterprise. The organizational structure can be classified under following two types: ADVERTISEMENTS: 1. Organizations choose their organizational structure based on many factors like: size, its geographic location, the manner of delivering different products and services that they will offer. Functional Structure 2. The key difference between functional and divisional structure is that functional structure is an organizational structure in which the organization is divided into smaller groups based on specialized functional areas such as production, ... “Advantages & Disadvantages of Divisional Organizational Structure.” Chron.com. A divisional organizational structure breaks the company down into units that are self-contained and generally independent from one another. Each has its inherent advantages and disadvantages. The primary reason for the firm’s success is its structure. We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. Alignment of corporate and divisional goals. Divisional structures developed from the traditional functional structure, which features departments built on related work tasks, such as marketing. Multi-divisional structures can be costly. More advantages and disadvantages of divisional structures, as well as its contingencies, are cited below. Some of the advantages and disadvantages of a Divisional organizational structure are as follows. The divisional structure alludes to organizations that structure initiative as per diverse items or tasks. 3. Functional expertise and efficiency. Decentralized management into departments of specialization, and Banana Republic & disadvantages of organizational structure types, the structure... 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