Management and Organizational Behavior
Introduction
(2005), defined organizational structure as the formal relationship that each person has to another within an organization and is typically depicted using the organizational chart (). It has its three main types: the function oriented, service oriented; and matrix (, 2005, ). (2007) defined organizational structure as the hierarchy within an organization or business. It is important in any business and organization, because it will help to deal with and facilitates relationships, roles and responsibilities, levels of authority and supervisory or reporting lines (, ). It can also help to determine which human, financial and technical resources are available and how they should be allocated and which of the resources are lacking (, ).
Organizational Structures reflects the level of growth and stage of the company or the organization. The four stages are: the emergent, the launch or growth, the consolidation and the mature (, ). stated that the three types of organizational structures are: the hierarchical structures, the team structures and the network structures. These said types of structures indicate on how the organization functions and how it is managed; how the information flows and process inside the organization; and how flexible or responsive the organization is ().
This is important because it will be used throughout the overall transactions of the company and organization that will eventually reflect to its overall performance and production.
Different companies and organizations require different types of organizational structures. It is chosen based on the present structure that is used as well as the areas that are in great need for new and improved structure.
Functional Organizational Structure
Function oriented or functional organizational structure makes supervision easier because supervisors specialize along the line of expertise (, 2005, ). It is well suited for sport medicine clinics and universities with large staffs because it enables to facilitate allocation of staff members to projects for which they have special skills and knowledge (, 2005, ). In this type of organizational structure, the employees are working in departments based on what are they doing or their area of responsibilities. Functional structure offers authority to the functional heads and the structure is sectioned by departmental groups.
It enables the company to have a simple and clear coordination from the top management; also reduces overhead; it also provides clearly marked career paths fro hiring new employees and promoting employees; and most of all employees will be able to work together with their colleagues who have the same interests.
Accenture is one of the best examples of companies that are using the functional organizational structure. Accenture is an American company that offers technical support to other companies in the world. It is a global management consulting firm, technology services and outsourcing company that is committed in bringing innovation to their client, in order for them to become high-performance businesses and government (, 2005)
The company is divided into two groups or categories in terms of services that they are offering to their client. The IT department focuses on the technical needs such as deployment, implementation and training. It also focuses on the software, networking and hardware that are needed by their client. On the other hand, Business Process Outsourcing focuses on the documentation and other mild analysis of the client’s request. By doing this the company will be able to divide the task in different areas and help to lessen the work of the IT department that bears the biggest responsibilities. It will also help to manage the skills and talent of their employees and eventually help them to detect and discover the strengths and weaknesses of each and every individual.
It also offers fairness and equality of work in the company.
Divisional Organizational Structure
(1996) described divisional structure as the type of organizational structure that can be organized by product or geography (). Divisional structure divides the employees based on the product/customer/ geographical location and other segments of the whole product or service that the company is offering.
The functional areas within this said structure may be centralized or separated by product lines.
Divisional Organizational Structure has its strategic business unit or SBU or the structure that are arranges into group by division (, 1996, ). It is organized by markets, products, shared resources and profit responsibilities (, 1996, ).
The biggest example for this type of organizational structure is the Procter and Gamble. Procter and Gamble management divide its overall production into three categories or what they called as the three Global Business Units or GBU, that are responsible for manufacturing, marketing and spreading product innovation throughout the company’s product categories and geographic markets: the Facial and Homecare; the Beauty Care; the Baby and Family Care; the Health Care; and the snack and beverages (, 2004, ). Using this type of structure, the management of Procter and Gamble will be enabled to identify specific profits and losses in a particular product category (, 1996, )
This was done in order for the company to focus in a given classification of their product. It can also help every division to act autonomously; therefore any change from other division will not affect the performance and productivity of the other division. It is also the main strategy of the company in gaining competitive advantage for them to be able to be ahead against their competitors in terms of taking advantage of globalization. This separation helps the company to attain its success throughout the countries that they are operating (, 1996, ). The use of divisional structure enables easy flow of innovation throughout the company around the world (, 2004, ). It also helps the company to learn and analyze the needs and demands of the consumers as well as commercialize their ideas and innovations in a profitable and in the quickest way (, 2004, ).
It also helps the company to maintain the level of their performance in their global and local market.
Procter and Gamble is also using their Market Development Organization or MDOs, it is the complement of GBUs but it focuses mainly on the geographical location of their market. It helps the company to move initiatives to local markets in more faster, less cost more creative manner (, 2004, ). This was done by tailoring the company’s global programs to their local markets and uses the data that have been gathered from the local consumers and retailers to help the development of the company’s overall marketing strategies (, 2004, ).
Project Team Structure
Project team structure is consists of an autonomous project team, existing in independently from the rest of the company (). It is assembled for a specific project under the action of the product or task manager. One of the unique characteristics of this structure is that the team is temporary and will be disbanded when the project is complete ( ). Project team structure enables the company to maximize the probability of completing a project on time and within the preferred budgets and specification ( & , 2004, )
The advantages and benefits of this kind of structure is just the same as of the functional structure, which focuses on the hiring and promotion of employees.
One of the greatest examples of this kind of structure is the Convergys. It is a telemarketing company that is based in US, Philippines, India and other countries. Like any other telemarketing companies particularly business to business telemarketing, it offers marketing service for their client.
The company is composed of different teams that cater to different clients from different part of the globe. Each team will be handled by different project manager and will handle different projects from different clients.
Although the company is offering regularization of work, each contract from client can be composed of different employees from different past teams.
Each team has an autonomous management. The performance of each individual or employee will be added to the overall performance of the team. Each contract has its duration of date and if the time comes for the contract to expire, the team will be dissolve. The company will again regroup the team for another contract and so on.
By doing this strategy, the company has attained its success and enable for them to serve different clients simultaneously. This enable the managers as well as individual employees to stand on their own and develop self confidence as well as develop their team work, which is the most important factor in any company with any type of organizational structure.
Bibliography
Appendices
Appendix A The Product Division of Procter and Gamble
Source: (, 2004, )
Appendix B Sample Organizational Chart of Functional Organizational Structure
Source: (, 2005, )
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