1. Functional Structure involves the departmentalization in which
positions are grouped according to there main functional- specialized
area. To make it more clear and for example, the Production or
operations function combines activities directly related to
manufacturing a product or delivering a service. Marketing focuses on
the promotion and sale of products and services. Human resources are
responsible for attracting, retaining, and enhancing the effectiveness
of organization members. Finance is concerned with obtaining and
managing financial resources.
The advantages and Disadvantages of this structure are as follows:
Advantages:
In depth Development of expertice
Clear career path within function
Efficient use of resources
Possible economies of scale
Ease of coordination within function
Potential technical advantage over competitors
Disadvantages:
Slow response time on multifunctional problems
Backlog of decisions at top of hierarchy
Bottlenecks due to sequential tasks
Restricted view of organization among employees
Inexact measurement of performance
Narrow training for potential managers
2. Divisional structure is a type of departmentalization in which
positions are grouped according to similarity of products, services,
or markets. With the divisional structure, each division contains the
major functional resources it needs to pursue its own goals with
little or no reliance on other divisions. There are three major forms
of divisional structure:
A. Product
B. Geographic
C. Customer
Divisional structure has also its advantages and disadvantages:
Advantages
Fast response to environmental change
Simplified coordination across functions
Strong orientation to customer requirements
Simultaneous emphasis on division goals
Accurate measurement on division performance
Broad training in general management skills
Disadvantages
Duplication of resources in each division
Reduction of in-depth expertise
Heightened competition among divisions
Limited sharing of expertise across divisions
Restrictions of innovation to divisions
Neglect of overall goals
3. Hybrid structure is a form of departmentalization that adopts parts
of both functional and divisional structures at the same level of
management. It attempts to incorporate many of the major advantages of
functional as well as divisional departmentalization. Many
organizations, especially large ones, have some combination of
functional and divisional departments.
The Advantages and Disadvantages of this structure are pointed out
here below:
Advantages
Alignment of corporate and divisional goals
Functional expertise and/or efficiency
Adaptability and flexibility in divisions
Disadvantages
Conflicts between corporate departments and divisions
Excessive administrative overhead
Slow response to exceptional situations
4. Matrix structure is a type of departmentalization that superimposes
a horizontal set of divisional reporting relationships onto a
hierarchical functional structure. The result is a structure that is
both a functional and a divisional organization at the same time.
There are two chains of command, one vertical and one horizontal.
Again this structure has its advantages and disadvantages:
Advantages
Decentralized decision making
Strong project or product coordination
Improved environmental monitoring
Fast response to change
Flexible use of human resources
Efficient use of support system
Disadvantages
High administrative costs
Potential confusion over authority and responsibility
Heightened prospects for interpersonal conflicts
Excessive focus on internal relations
Overemphasis on group decision making
Possible slow response to change
Many have attempted to develop the ideal organization structure. A
structural configuration that seemed to work for one organization was
a deterrent to effectiveness in another. Researches came to recognize
that the best structure for a given organization depends on such major
contingency factors as technology, size, and environment.