Divisional organizational structure

Advantages of Divisional Structure Accountability. The divisional organizational structure allows each division of a firm to be accounted for in isolation. Responsiveness to external. Other articles from advergize.

Thus, a company organized on divisional lines could have operating groups for the United States or Europe, or for commercial customers, or for the green widget product line. Examples of a product line are the various car brands under General. The three primary divisions of this type of organizational structure is product, market and geographic.

Additional subcategories fall under each of the three primary divisions of the organizational structure. What is a Divisional Structure ? A divisional structure is a manner of designing an organization so that it is split up into semi-autonomous units called divisions. As stated earlier, companies organize a division when the company grows to an unmanageable size. Each storefront carries just one brand or line of products unless the company has completed a growth cycle. Because each division operates as a separate entity, it also needs its own resources, as sharing resources among divisions may not always be practical.

Any business employing more than a few people needs to organize itself into a structure that defines how information travels within the company, and how workers in different roles and at different levels of responsibility relate to each other. Organizational structures increase efficiency by ensuring that all employees know to whom they report and from whom they take direction regarding their work activities. The two most common types of organizational structure are known as functional and divisional.

A functional organizational structure organizes the chain of authority by occupational function. For example, the administrative functions may be grouped together, delineating them from other functions such as sales and production. These broad areas may be further subdivide as when administration is divided into human resources and accounting units.

Employees within each functional unit may have similar titles, backgrounds and job descriptions, although they may assume different levels of responsibility and supervision within their units. See full list on yourbusiness. Divisional organizational structures divide the corporation into units based on factors such as geography or product line. For example, a car manufacturer may have a separate division for each class of vehicle it produces.

A national retail chain might have a division for each state or region where it has sales outlets. The lines of authority seen in functional structures provide for clear channels of communication and clear expectations about who reports to whom. This increases efficiency by eliminating guesswork and duplication of effort.

Within each functional unit, employees of related specialties work together, providing for ease of information sharing. The hierarchical structure makes it easy to identify promotional paths for employees, providing an additional motivating factor for the workers. The major disadvantages of functional structures are the built-in barriers to interdepartmental communications and the tendency for specialists within a unit to develop tunnel vision, which can stifle innovation. A company with this structure is efficient as long as it stays within its founding purpose, but it may respond ineffectively if outer circumstances change or the organization seeks new areas of operation.

In a divisional organization, personnel from multiple specialties work together on projects. This stimulates innovation and reduces problems involved with interdepartmental communication. Because the major divisions operate on the same level with each other, the projects have a better chance of getting the resources and funding they need. Also, if the divisions are very large, they might tend to organize themselves functionally, thus experiencing the same disadvantages that are typical of functional structures. The divisional structure is a type of organizational structure that groups each organizational function into a division.

Each division enjoys some degree of autonomy, complete with. It is a type of organizational structure that groups each organizational function into a division. Many large organizations with diversified activities have reorganized themselves away from the simpler and basic functional structure towards a divisional structure which is more suited to their activities. Instea all employees (represented by the green boxes) have dual reporting relationships. A divisional organizational chart reflects a company organized along a product line or specific geography.

For instance, in a large manufacturing company, the divisions may stand for different production lines. Each production line has its own subordinate functional departments, such as accounting and customer service. This organizational style combines a little of the top-down hierarchy with a decentralized management style where communication travels faster. A flat structure establishes a top-down management style for temporary projects or important events.

In the functional structure , the specialisation is based on functions. In divisional organizational structure s, a company’s divisions have control over their own resources, essentially operating like their own company within the larger organization. If you’ve had a job, you likely worked in a functional organizational structure. The functional structure is.

Larger companies that operate across several horizontal objectives sometimes use a divisional organizational.