Organization Structures


Whyis a functional structure the most common form of structure and whatare some of the concerns associated with this form

Functionalstructure is the most common form of structure because it allows anorganization to group it employees depending on the similarities inthe roles they play. This allows the organization to group theiremployees into categories whereby employees in a similar categoryhave similar specialization in undertaking of roles assigned to them.For instance, banking industry may group its staff on telling andcredit duties.

Despiteits strength on specialization, there are still concerns aboutfunctional structures. This form of structure is highly associatedwith high levels of bureaucracy making it hard for the organizationto respond to changes in the market in the appropriate time (Garethet al, 2006). Communication process is also fixed resulting inmanagement issues in running the organization. This as well resultsin slow decision making. Although the groups can perform at highlevels of efficiency, there is some compromise in the level ofco-operation.

Whydo organizations make use of divisional structures and describe eachstructure

Adivisional structure is that which is made up of several parallelteams engaging in the production of a single product or in offering asimilar service (Gareth et al, 2006). Most organizations make use ofdivisional structures because the divisions allow each team to focusits operations on a specific good or service and thus making thedivisions to yield good results. The groups are also privileged tohave a leadership structure in support of the group’s objectives.For instance, union Pacific company has successfully applied thisstructure.

Thedifferent types of divisional structures include regional,multidivisional, and the product type.

Regional/geographic structure

Thisstructure revolves around grouping of activities basing on thegeographical locations of the organization. It is a very importantdivision in scenarios where customer tastes and preferences differ asdetermined by different geographical regions. This is because itallows for flexibility of products depending on the particulargeographical region.


Multidivisionalform is a legal entity whereby a particular parent company hassubsidiary companies working under it. In such a case, the subsidiarycompanies benefit by working under the brand name of the main parentcompany (Gareth et al, 2006). The parent company is also expected tooversee the progress of the subsidiary companies.

Producttype division

Inthis type, a team is selected to work on only a specific product. Thedivision is expected to deliver on the production of a certainproduct to be marketed in a specific area. The combination of thesedifferent ideas results in production of efficient products and thusgood returns for the company.

Describea network, a matrix, and a product team structure and suggest someshortcomings for each

Anetwork structure is also referred to as lean structure and keeps themajor functions of organizations internal but outsources the minorfunctions from other functions (Gareth et al, 2006). Its leadershipis viewed to be less decentralized with more flexibility. It is theresponsibility of the managers to co-ordinate and control theinternal and external functions of the firm.

Theshortcoming for this structure is that the nature of the leadershipcan result in complicated relationships in the firm. For instanceaccountability lines may be unclear and it can also experience overreliance on the external vendors (Gareth et al, 2006). These are theexamples of the unpredictable variables that can potentially reducemajor function of the company and thus affect its success negatively.

Amatrix structure

Amatrix structure is a much complicated structure whereby grouping ofemployees is done simultaneously by two differing operationalperspectives. The large companies are best suited to apply this kindof structure in its operations because of the complexities associatedwith the company. The major organizational perspectives includeproduct and function, region and function, and product and region(Gareth et al, 2006). This structure gives team members a chance toshare information more readily and easily.

Themajor shortcoming for this structure is the complexity associatedwith its operations. For instance, there exists complexity in thetransfer of commands in a case where the employees are expected toreport to both product and functional leaders. Because of theincreased complexities, there could be a need for high employee tomanager ratio which leads to an increase in the operational costs andemployee conflicts in the industry (Gareth et al, 2006).

Aproduct team structure

Inthis form of structure, a product team composes of employees withcomplimenting skills and combined efforts to work towards a commongoal for the organization. Creation of the product teams is done bycategorizing employees in a manner that ensures generation of wideexpertise to address a certain operational requirement for theindustry. The employees report to a primary product manager and asecondary functional manager.

Theshortcoming for this structure is the fact that it risks onduplicating efforts in a situation where all the product team have asimilar structure. There is also an increased potential for conflictsamong the employees in different teams but producing similar product.

Whatare some of the challenges facing designers seeking to buildeffective organizational hierarchies?

Differentorganizations require different organizational structures. As anorganization undertakes the decision to design an effectiveorganizational hierarchy, it encounters various challenges andobstacles.


Inmost cases, the designers of organizational hierarchies do not getthe motivation they need in their endeavor to come up with the bestorganizational hierarchy. This is mostly experienced in largeorganizations where the top management does not give support to thejunior managers thus demotivating them in their desire to come upwith organizational structures that are effective for theorganization.


Thedesigners intending to come up with effective organizationalhierarchies may face communication challenges especially when passinginformation to the top management. This may result in delay infeedback thus resulting in a slow decision making thus affecting theprocess of coming up with an effective organizational hierarchy.

Lackof support by the organization

Thepeople tasked with the responsibility of designing an organizationalhierarchy may lack the support they need from the organization asthey undertake the responsibility. This becomes a challenge to thedesigners as they try to identify the effective organizationalhierarchy.

Whatis a bureaucracy and what are the advantages associated with itsusage when designing anorganizationalhierarchy?

Bureaucracyis a large administrative organization with the responsibility ofhandling the day to day operations of an industry, government, orsociety (Garth et al, 2006). It presents administrative ideas on howto organize and group a large number of people intending to worktogether.

Advantagesof bureaucracy

Bureaucracyallows for proper control- because bureaucracy allows for creation ofmany management levels, command series and thus decision making isclear. In such a situation, authority is centralized with specializedand detailed job descriptions. Managers are given the opportunity tomonitor outcomes and thus control over the operations of theindustry.

Economiesof scale – because bureaucracy allows for grouping of jobsdepending on the function resulting in economies of scale. Thevarious departments in the industry are in a position to shareefficiently. Because of its nature of specialization, employees arein a position to deliver efficiently thus resulting in increasedproductivity. For example, in the case of General Mills.

Organizationsapplying bureaucracy allow for clear authority lines – bureaucracyapplies a chain of command whereby decisions and new policies arecreated by the management and transferred down the management line upto the junior staff of the organization (Gareth et al, 2006). Thispromotes good work relations with each employee being aware ofcommand chain and the management is aware of its boundaries.

Whyare empowered organizational teams and flattened hierarchies becomingmore prevalent in organizations?

Empoweredorganizational structures have few ranks and hierarchy. They worksimilarly with flat hierarchies which consist of the organizationalstructures with few intervention levels between the management andthe ordinary employees. Empowered and flattened hierarchies havebecome prevalent because they promote all employees involvement inthe issues of the organization because of its decentralized decisionmaking. This ensures more productivity since workers are believed tobe more productive if they are involved directly in the decisionmaking at the organization.


Gareth,R. et al. (2006). Organizationtheory, design, and change.New York: Prentice hill Publishers.