The organization structures of: functional organizational structure, multi-divisional organization, matrix structure.

University Degree Business and Administrative studies

The organization structures of

: functional organizational structure,

multi-divisional organization,

matrix structure

Any firms produce their own system of organisation for the purpose of fulfilling their function effectively. The system of organisation structure could be dependent on their scale and type of companies. A medium-size company would be operated efficiently as a functional structure, for example. In this essay, three types of the organizational structure, functional organisational structure, multi-divisional organization, and matrix structure will be explained in turn by using each example of specific companies. And finally, it will be reported the advantages and disadvantages in each of the company organisations.

Functional organizational structure

EIDEN is an electrical appliance discount store that is a very competitive industry in Japan. More and more electrical appliances are selling more and more as a cheaper price in many electrical discount shops. Due to limited product range, there is a simple organisational structure, such as finance, personnel, sales, manufactures, and marketing sections. Also, there is a short chain of command and a wide span of control in this company. The few supervisors take responsible for the sales volume as a whole. As it mentioned above, the company has many competitive rivals due to competitive price of the products. The catch-phrase of EIDEN is ‘We will offer the cheapest price. So, please let us know, if you meet the cheaper price of the same products in the rivalry stores’. As a result, the product supervisors and sales directors are always turn their attention to the price of the rival products. As regards the advantages, the sales directors and supervisors are accurately able to understand the whole circumstances, particularly the sale volume and the improvement of service. In addition to this, it is obvious that it does not take so long when it comes to making an important decision. On the contrary, the volume of works will be inclined too heavily towards the functional specialists. As a result of this, it will become difficult to achieve a long-term strategic decision, the trend of next generation, for instance. Besides, sometimes it is difficult to co-ordinate across the functions because each the specialist has little idea of the different sections. So, it would appear that relatively small or middle size companies are suited to this type of organization.

Multi-divisional organization

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Multi-divisional organization

This type of organization structure seems to be popularized in large firms, such as supermarkets, department stores, pharmaceutical companies and so on. In order to operate more effectively with their works in terms of human resource and each department, the large companies divide into several roles in a section dependent upon products or areas. By decentralizing of the company area by area, each specialist of the section can concentrate on their own works. Moreover, the subordinates will be given satisfaction by involving in a decision-making. At the same time, they will gain a better knowledge of local information and condition because of being in charge of the area seriously. ASAHI, a big Japanese beverage and brewery company, for example, has subdivided into several sections by area in order to win the first place of the industry. As a matter of fact, the company was struggled with the lack of sufficient demands during the last decade, and then reorganized their basic structure on the whole, which was the new trial both for their company and for the industry. The subordinates are made responsible for not only delivering their products, but also for selling and marketing them in front of each the supermarkets or off-licenses as a part of short-term strategy. At the same time, the marketing sections are in charge of developing each original beer dependent upon each local taste. By bearing closely on the needs of local area, ASAHI could finally win the first place in 2000. However, there are also some disadvantages of the system of multi-divisional organization. The most obvious problem could be the conflict between divisions, such as contending for a skilled human resource and share of the budget. Although the top manager concentrates on a long-term strategy, they tend to take no notice of daily operations.

Matrix structure

Sometimes, a skilled worker of a section needs to co-ordinate with another section as a team temporarily according to what projects they have to do. The matrix structure will provide the avoidance of problems with the entrepreneurial and bureaucratic structures, because the team has to take responsibility of their own project. An example of UK aerospace industry, one of their clients will ask for a supersonic aircraft for a passenger plane to be developed and manufactured. Another client will ask for a military plane. There is a big difference in terms of a manufacturing process and purpose. The Society of British Aerospace Companies (SBAC) will set up to complete the two different project groups. Each project requires people with different skills in order to fulfill the projects. In this matrix management, the sales manager has two bosses, the sales director and the technical director, for instance. Through the project, the individual employees experience a further career and increase their motivation after achieving the success. As far as the weaknesses of matrix structure are concerned, a conflict might be occur between the project groups, such as fixing the blame on each other because it is unclear who is accountable to.

Thus, in order to improve the quality and development of companies, the system of organization structures are essential to achieve the customers’ requirements. However, matrix management structure should be utilized, and moreover an innovative change of the structure needs to be carried out, if it wants to make serious improvement to their companies.