Divisional structure

Divisional structure is not a possibility in small organizations. The organization may produce a variety of goods and services, and they might be operating in several regions, but they still do not have the resources to run so many different divisions and have the employees of same level in each division. Other articles from advergize. Examples of a product line are the various car brands under General.

However, it can cause higher total costs, and can result in a number of small, quarreling fiefdoms within a company that do not necessarily work together for the good of the entire entity.

While the divisions have control over their day-to-day. The divisional structure is a type of organizational structure that groups each organizational function into a division. It is a type of organizational structure that groups each organizational function into a division.

What is the definition of divisional structure? What are the four types of organizational structure? Is functional structure the same thing as divisional structure? Definition of divisional structure : A type of organizational configuration that groups together those employees who are responsible for a particular product type or market service according to workflow.

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. 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. Each division behaves like its own company, with its own top-level management and its own subdivided units. 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 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.

This is a more decentralized type of operation where each division functions much like its own separate company. Each division has its own set of functional units like research, manufacturing, marketing etc and is completely self-contained. It also utilizes a plan to compete and operate as a separate business or profit center.

A division is a collection of functions which produce a product. According to Zainbooks. America is seen as the second most common structure for. Organizational structure defines who is responsible for decision-making, establishes how various tasks and responsibilities are groupe and outlines the roles of people and departments within the organization. Two common types of organizational structures are functional and divisional structures.

While Gap is the company, there are three different retailers underneath the heading: Gap, Old Navy, and Banana Republic. By pulling resources from these departments to devote to a specific product, location or customer, the divisional organizational structure gains some advantages the functional structure lacks. Functional Structure.