Introduction to Design Models
What are the differences in the design models?
Functional (Traditional) Structure
Ideal for small businesses
Direct authority (CEO)
Functional, strict operations that are all directly operated by one source (CEO)
As complexity of airline functions increase, performance slacks
A proportionate saving in costs gained by an increased level of production
Low need for coordination between business units
Slow response time to changes
Hybrid Structure, as painted in article
Functional for both smaller and larger businesses
Functional, yet flexible operations, which focus primarily with business unit
Individual Business units, with broad decision making authority by management
Due to split authority, ability for flexibility as functions increase
Uses strengths from Business and Functional structures
Business Unit Structure
Ideal for large businesses
Flexible operations by unit, separated with overarching strategic corporate center, under a CEO
Management Decisions made by business units
Independent business units can change strategy for success in marketplace, levels of production and costs/gains are variable
High need for coordination between business units
Quick, rapid response time to changes
Compare and contrast the standard airline organizational functional structure model with the hybrid structure based on independent business units.
The comparison and contrast list is fairly extensive. The differences are outlined above. The main difference, I see, between the two models is the fact that the business model allows more than one person to analyze and make the best move for their business units and maximize potential. With this structure, however, it is still stated that the business units must remain very interconnected in order to make the overall operation smooth. The CEO similarly has the position of oversight, where they only step in when scenarios need guidance to the overall mission. The functional (traditional) structure is the opposite. I would compare it
Functional (Traditional) Structure
Ideal for small businesses
Direct authority (CEO)
Functional, strict operations that are all directly operated by one source (CEO)
As complexity of airline functions increase, performance slacks
A proportionate saving in costs gained by an increased level of production
Low need for coordination between business units
Slow response time to changes
Hybrid Structure, as painted in article
Functional for both smaller and larger businesses
Functional, yet flexible operations, which focus primarily with business unit
Individual Business units, with broad decision making authority by management
Due to split authority, ability for flexibility as functions increase
Uses strengths from Business and Functional structures
Business Unit Structure
Ideal for large businesses
Flexible operations by unit, separated with overarching strategic corporate center, under a CEO
Management Decisions made by business units
Independent business units can change strategy for success in marketplace, levels of production and costs/gains are variable
High need for coordination between business units
Quick, rapid response time to changes
Compare and contrast the standard airline organizational functional structure model with the hybrid structure based on independent business units.
The comparison and contrast list is fairly extensive. The differences are outlined above. The main difference, I see, between the two models is the fact that the business model allows more than one person to analyze and make the best move for their business units and maximize potential. With this structure, however, it is still stated that the business units must remain very interconnected in order to make the overall operation smooth. The CEO similarly has the position of oversight, where they only step in when scenarios need guidance to the overall mission. The functional (traditional) structure is the opposite. I would compare it
References: Jones, G.R. (2013). Organizational Theory, design, and change (7th ed.). Upper Saddle River, NJ: Pearson Education, Inc.