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OrganizationalOrganizationalOrganizationalOrganizational

StructuresStructuresStructuresStructures

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Information StructuresInformation StructuresInformation StructuresInformation Structures

Hierarchical

Network

Linear

Matrix

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Substitution ofSubstitution ofSubstitution ofSubstitution of

Information for HierarchyInformation for HierarchyInformation for HierarchyInformation for Hierarchy

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Functional StructureFunctional StructureFunctional StructureFunctional Structure

Individuals engaged in one functional activity are groupedinto one unit, such as HRM, Sales.

Advantages Makes efficient use of specialized resources Makes supervision easy

Disadvantages

Difficult to get quick decisions Difficult to determine accountability and judge

performance Coordination of the activities may be difficult

Chief Executive

Board of Directors

Production Marketing Accounts Personnel IT

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Divisional StructureDivisional StructureDivisional StructureDivisional Structure

Arranged around main products, services or customergroups. Can be further divided into either product orcustomer structures which enable staff to specialise inparticular product or customer group or geographic

structure where managers divide the organisationgeographically, usually according to location of customers.

Hewlett Packard

Imaging andPrinting Group

PersonalSystemsGroup

EnterpriseSystems Group

HP ServicesHP Financial

Services

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Organization by DivisionOrganization by DivisionOrganization by DivisionOrganization by Division Individuals engaged in one functional activity are

grouped into one unit. Advantages

Easy coordination and high performance

Speed of decision making is greater

Positive competition between divisions

Better control as each division can act as separateprofit centre and clear accountability

Disadvantages

Duplication of functions (e.g. different sales force foreach division) Negative effects of competition Lack of central control over each separate division

The interests of the division may be placed ahead ofgoals of organisation

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Organisation by AreaOrganisation by AreaOrganisation by AreaOrganisation by Area

Hewlett-Packards HeadquartersWorldwide

AmericasHouston, Texas

Europe, Middle East, AfricaGeneva, Switzerland

Asia PacificHong Kong

Hewlett Packard

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Organisation by AreaOrganisation by AreaOrganisation by AreaOrganisation by Area

Advantages

Serve local needsbetter

Positive competition More effective

communication

between firm andlocal customers

Disadvantages

Conflict between localand centralmanagement

Duplication ofresources andfunctions

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Matrix StructureMatrix StructureMatrix StructureMatrix Structure

A matrix or multidimensional organizationalstructure may have several structures at the

same time.

For example, an organization may have bothtraditional functional areas and major project

units.

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Matrix StructureMatrix StructureMatrix StructureMatrix Structure....

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Matrix StructureMatrix StructureMatrix StructureMatrix Structure....

Advantages Efficient means of

using specialised skills

Easy coordination work as a group

Flexibility andadaptability tochanging environment

Ability to understandeach others workload

Disadvantages Conflict between local

and central

management Need good

interpersonal skills

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Virtual OrganizationVirtual OrganizationVirtual OrganizationVirtual Organization

Temporary network of independentcompanies-suppliers, customers,competitors linked by information

technology to share skills, costs and accessto one anothers markets.

It will not have a central office, organizationchart or a hierarchy!!