Functional vs divisional vs matrix structure

When establishing a structure , business leaders should decide how a structure best aligns with the company’s principles and goals and how it. The structure of the organization has an impact on how information, resources and operations are conducted. Its objective is to carry out operations smoothly and efficiently. The key difference between matrix structure and functional structure is that matrix structure is a type of organizational structure where employees are grouped concurrently by two different operational dimensions whereas functional structure is a structure that divides the organization based on specialize.

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The matrix structure is a type of organizational structure where employees are grouped concurrently by two different operational dimensions. This means that a matrix structure combines two organizational structures, most commonly a functional structure and a divisional structure. By nature, the matrix structure is inherently complex and costly to implement making them appropriate for large scale organizations that generally undertake various projects.

OPQ is a multinational company that p. A functional structure is a commonly used organizational structure in which the organization is divided into smaller groups based on specialized functional areas such as production , marketing , and sales. Each function is managed by a departmental head that has a dual responsibility to be accountable to the top management and to direct the respective department to achieve favorable performance. Such functional areas are also referred to as ‘silos’.

The difference between matrix structure and functional structure mainly depends on the way they are structured and managed.

For organizations that are significant in scale with many product groups, a matrix structure is ideal for management purpose. If the organization is small or medium scale and has less diverse operations, then adopting a functional structure is appropriate. Proper chain of command and effective allocation of resources lead to higher employee motivation and cost savings. An organizational structure , so designed that it is bifurcated into semi-autonomous divisions on the basis of product, service, market etc, is known as divisional structure. What is the definition of divisional structure?

Divisional Structure The divisional structure is broken down into three areas: product, market, and geographic. An example of this would be a company that produces three distinct products, product a, product b, and product c. The key difference between functional and divisional structure is that functional structure is an organizational structure in which the organization is divided into smaller groups based on specialized functional areas such as production, marketing and sales whereas divisional structure is a type of organizational structure where operations are grouped based on divisions or separate product categories. Divisional structure is a type of organizational structure where operations are grouped based on divisions or separate product categories. Here, separate functions such as Production, HR, and finance can be seen under each division to support each product line. Divisional structures are also named as ‘M-form’ (Multidivisional form) and are most suitable for companies who operate with several product categories in geographically dispersed markets.

Multinational organizations such as Unilever, N. If the tasks are segregated according to separate divisions or product categories, such organizations are divisional organizations. An organization that has a management structure of sharing functions is called functional organization. The organization structure should be carefully chosen and this will depend on the nature of the business and the preference of the top man.

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.

The two most common types of organizational structure are known as functional and divisional. Organizational structures increase efficiency by ensuring that all employees know to whom they report and from whom they take direction regarding their work activities. For example, the administrative functions may be grouped together, delineating them from other functions such as sales and production. A functional organizational structure organizes the chain of authority by occupational function.

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. 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.

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.

Particularly large organizations adopt this structure to gain the advantages of both functional and divisional structures. If you’ve had a job, you likely worked in a functional organizational structure. The functional structure is based on an organization being divided up into smaller groups with specific tasks or roles. Each department has a manager or director who to an executive a level up in the hierarchy who may oversee multiple departments.

One such example is a director of market. Larger companies that operate across several horizontal objectives sometimes use a divisional organizational structure. One example of this is a company like General Electric.

This structure allows for much more autonomy among groups within the organization. GE has many different divisions including aviation, transportation, currents, digital and renewable energy, among others. Under this structure , each division essentially operates as its own company, controlling its own resources and how muc. A hybrid organizational structure, the matrix structure is a blend of the functional organizational structure and the projectized organizational structure. In the matrix structure, employees may report to two or more bosses depending on the situation or project.

For example, under normal functional circumstances, an engineer at a large engineering firm could work for one boss, but a new project may arise where that engineer’s expertise is needed. For the duration of that project, the employee. While the previous three types of organizational structures may work for some organizations, another hybrid organizational structure may be better for startups or small companies. Blending a functional structure and a flat structure in a flatarchy organizational structure , which allows for more decision making among the levels of an organization an overall, flattens out the vertical appearance of a hierarchy. The best example of this structure within a company is if the organization h. The result is creation of dual line of authority that is balanced by top managers.

It is formulated with the desire to maximize the strengths and minimizing the weakness of the both structures. There are many types of organizational structures. There’s the more traditional functional structure , the divisional structure , the matrix structure and the flatarchy structure. Multi- divisional Versus Matrix Structure When all the divisions within a multi- divisional organisation are functioning well, a healthy, friendly rivalry can develop between divisions without undermining the sense of working toward overall company goals.

In the functional organizational structure , projects are initiated and executed by the divisional managers, who assume the project manager duties in addition to their regular, functional. Functional Structure.