Organizational Structure

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Organizational Structure by Mind Map: Organizational Structure

1. Simple Structure

1.1. The oldest & most common organizational.

1.2. Motives: Highly informal.

1.3. Pitfalls: Employees may not understand their responsibilities.

2. Functional Structure

2.1. Where the major functions of the firm are grouped internally.

2.2. Motives: Enhanced coordination & control.

2.3. Pitfalls: Impeded communication & coordination due differences in values.

3. Divisional Structure

3.1. Where products, projects, or product markets are grouped internally.

3.2. Motives: Quicker response to changes in the market environment.

3.3. Pitfalls: Can be very expensive.

4. SBU Structure

4.1. Similar products or markets are grouped into units to achieve synergy.

4.2. Motives: Planning & control done by the corporate office.

4.3. Pitfalls: Can be difficult to achieve synergies .

5. Holding company Structure

5.1. Where businesses in a corporation’s portfolio are the result of unrelated diversification.

5.2. Motives: Cost savings due to fewer personnel and lower overhead.

5.3. Pitfalls: Corporate office has little control .

6. Matrix Structure

6.1. Functional departments are combined with product groups on a project basis.

6.2. Motives: Increases market responsiveness.

6.3. Pitfalls: Can lead to power struggles & conflict .

7. Boundaryless Designs

7.1. Organizations in which the boundaries, including vertical, horizontal, external, and geographical boundaries, are permeable.

7.1.1. Motives: Transaction costs between the firm and its suppliers are reduced. Pitfalls: Relationships between individuals become more important than profits

7.2. Barries-free organization

7.2.1. Motives: Leverage the talents of all employees. Pitfalls: Difficult to overcome political and authority boundaries inside and outside the organization.

7.3. Modular organization

7.3.1. Motives: Directs firm’s managerial and technical talent to the most critical activities. Pitfalls: Inhibits common vision through reliance on outsiders.

7.4. Vistula organization

7.4.1. Motives: Enables the sharing of costs and skills. Pitfalls: Leads to potential loss of operational control among partners.

8. International Operations

8.1. Multi-domestic Strategies use:

8.1.1. International division structure. Geographic-area division structure .

8.2. Global Strategies use:

8.2.1. Worldwide functional structure . Worldwide product division structure .

9. Ambidextrous Designs

9.1. Organizational designs that attempt to simultaneously pursue modest, incremental innovations as well as more dramatic, breakthrough innovations.

9.2. Adaptability: managers’ exploration of new opportunities and adjustment to volatile markets in order to avoid complacency.

9.3. Alignment = managers’ clear sense of how value is being created in the short term and how activities are integrated and properly coordinated.