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A business organization is a profitable firm that moves towards its vision through missions. In this process, a group of employees works under a management in order to their designation in the org. So there should be a structure necessary to the management to handle the employees efficiently and effectively. The business structure is what a framework that arranged the employees in various levels according to their designation in an organization. A business structure should have some elements itself that make the structure efficiently and effectively. Departmentalization, Unity of command, chain of command, centralization or decentralization, formalizations and span of control, work specialization are the elements that make an organizational structure. However, these elements have an impact in the business structure. The departmentalization is one of the most important elements that can be determining the other elements for an organizational structure. This element divided the jobs under some departments which is created according to the function of the business or product what they are producing or their geographical business locations or their customers needsâ€¦
However, there is some business structures defined for the help of the business organizations. These structures will help to make the organizational hierarchy for the businesses. The business structures will organize the authority, chain of command and the way of management of the business organizations. Usually functional, product, customer, geographical, process and matrix structures are adopted by the business organizations. There may be the chances to select more than one structure at the same time as well. This part of the assignment will refer the functional, geographical and product structures which for the possible alternative structure for my business.
The functional structure is a most common structure for all businesses. Whether the organizations have adopted any other structures, the functional structure will be fulfilling the organizational structures. In this structure, the business will have divided according to the functions they have doing in the organization. These functional areas called as departments in the firm. Marketing, production, accounting, human resource and sales are the most common departments in an organization. These all departments have a manger and other employees such as middle level managers, supervisor and other operatives who are working under the manager.
Corporative eventsFor example a marketing department structure can be designed as in the picture
The functional structure will allow the employees specialization in their particular works. Because of this structure, the level, authority and responsibilities are clearly defined. As well as, the workers get the chance to work with the colleagues who have the same abilities and professional and it can create an enjoyable environment in work.
However, the disability of a broad overview on the organization for the each department can be a disadvantage in this structure. As well as, the delay in the final decision making because of the top level authorities located in the top of the structure, the co-ordination between the departments are less and generate the future manager with a narrower experience because of the careers of the employees are defined in the structure also some other disadvantage of the functional structureâ€¦
On the other hand, the product structure designed the organizational structure according to the product the company produced. The organizations which have multiple or different products will select the product structure. UNILEVER is a perfect example for the production structure. Here also every product areas have a chief or manager and under him others will work according to their levels in the structure. In the product structure, each of the manufacturing areas will have their own functional departments as we already discussed in the above paragraph. This structure makes easier to manage the working process in each production areas because of there is no interference from the other production areas. The manager of the product structure can able to cover the all divisions efficiently because they have the broader view on their production division. As well as, the decisions making is faster in this structure than the functional structure.
This is a simple example for the Product structureâ€¦..
C.E.O & Top Management
House hold Manager
Groceries & Food Manager
Functional Department under the House Hold Division
Functional Department under the Groceries & Food Division
The multinational companies which are covers all over the world by their products can get the advantages of the geographical structure. Because marketing the same product in America and Asia may have several different to do so. So according to the geographical position of the business it has to be changed to do the business there. In the lager organizations, having a centralized authority is really difficult to move towards the market. So these kinds of businesses divide their business activities into regions and promote their business from that level. It is helps to understand the real time situation of the market. In this structure, every regional manager will be the chief for the activities of the business. In the geographical structure, under the regional managers the production or functional structure will be follow the all other activities in the organization as we already discussedâ€¦. For the biggest business organization this is a better way to do the business. Because when it divided into the regional then it will easy to reduce the costs in the production. As well as, to create the good market in the region the organization has to consider the current situation of the area. So it is easy for the multinational organizations when they have a geographical structure.
Example for the geographical structureâ€¦
C.E.O & Top Management
Asian Regional Chief
American & European Chief
Functional Department under the Asian regional management..
Functional Department under the American & European Management
On the other hand, the organizational cultures also will have an important place in organizations structure. Organizational culture explains the way of the psychology, attitudes, set of beliefs, norm, beliefs and personal and cultural values of an organization. Simply you can say that the organizational culture is the way of doing things around the organizational. Charles Handy is one of the writers who described the four main types of organizational culture in his book "Gods of Management".
Handy define the four cultural types that can be followed by the organization according to the structure which they have. Task culture, person culture, power culture and role culture are the four types of the Handy's organizational cultures.
When an organization adopt the functional structure, the role culture will suitable for their business operations. In the role culture, the employees are given jobs according to the function of the organization. Their role in the organization well defined and employees can focus on their particular job according to the job description, procedures, rules and systems. In this culture, work specialization is one of the benefits for the organization. This culture most suitable for the government departments, local authorities, public utilities and the public sector in general. Those kind of cultural organizations will face the problems when the environment changes. Because of the role cultural organizations are having advantages with the steady business environments.
On the other hand, entrepreneurial structural organizations mostly have the power culture which is considering control as a key element. It is usually for the small size orgs. The one or more than one persons who own the organizations are in the position to take decision about the all operations. These fully centralized types of business have the advantage that they can react quickly at the times of crisis. But the employees of these orgs may de-motivate when their considerations ignored. As well as, lack of consultation may affect the business activities and the future of the business.
The matrix structure is a hybrid business structure that designs the structure of the project groups which are more than one department or organizations joined for working together. Handy describes the task culture for the matrix structure which has the cross-functional structure. Nowadays most of the business organizations have established the project groups for the particular tasks. This has become as a modern business strategy to complete a specific task in a time period. The task culture put the people in a group according to their specialization, up-to-date information and skills in the job. In this culture, there is a close association between the departments to complete the task. These organizations have the flexibility to adopt the business environmental changes quickly. And the employees who are in the task culture usually motivated because they are having authorities and responsibilities in the group. NASA is one of the examples for the task culture. They have put the people together in their missions.
Organizations are considering about their culture in recent years. Because of cultures are having the values and attitudes of an organizations. The organization structure decides the culture of the organization. These two factors have decided the organizational activities efficiently and effectively.