Saturday, 30 August 2014

Chit Chat: The Pro and Cons of Different Organisational Structures



Structure
Pro
Cons
Functional
·      Allows for rapid decision making
·      Capitalizes on specialization of business activities such as marketing and finance
·      Minimizes need for elaborate control system
·      Simple and cost effective
·      Accountability forced to the top
·      Discourage delegation of authority and responsibility
·      Poor products and markets planning
·      Leads to short-term, narrow thinking
·      Leads to communication problems
·      Low employee/manager morale
·      Minimizes career development
Divisional
·       Accountability is clear
·       Allows local control of local situations
·      Allows new products or regions additions
·      Allow precise control and attention to products, customers, and/or regions
·      Allow room for career advancement
·      Foster internal competitions
·      Promotes delegation of authority
·      Expensive
·      Limited transparency in ideas and resources
·      Foster unhealthy competition between divisions
·      Duplication of functional activities
·      Requires a skilled management force and complex control system
·      Some regions/products/customers may receive special treatment
Matrix
·     Employees can see results of their work
·      Facilitates uses of special equipment/ personnel/facilities
·      Promote sharing of functional resources
·      Allows clear project objectives
·      Projects are easily halt
·      Costly because due to more resources required
·      Violates unity of command principle
·      Creates dual lines of budget authority
·      Creates dual sources of reward/punishment
·      Share authority and reporting
·      Requires exception vertical and horizontal communication
·      Requires mutual trust and understanding




No comments:

Post a Comment