Organisational Structure and Leadership Essay Example
I. ORGANISATIONAL STRUCTURE:
Functional, Divisional and Matrix. Focus on the Classical theory of Henry Fayols 14 management principles. Remember at least five. If writing about unity of command, mention about unity of direction. (Show how they are different).
Organisational structure refers to the plan representing the relationships between the jobs and departments in an organisation. There are three main types of organizational structure: functional structure, Divisional structure and Matrix structure.
• Functional structure: The employees are working in departments based on what they are doing, for example, finance department, research department. This structure enhances the experience of each function. This structure saves us money because of the economies of scale. This structure makes the coordination between different departments more difficult than other structures. It also does not allow for flexibility because of the centralization.
• Divisional structure: It divides the employees based on the product/customer segment/geographical location. Each division is responsible for certain product and has its own resources such as finance, marketing, etc. Accordingly, this structure is a decentralized structure and thus allows for flexibility and quick response to changes. It also enhances innovation. It does not support the exchange of knowledge between people working in the same profession because a part of them are working in one division and the others are working in other divisions.
• Matrix structure: It combines both structures. For example, we can have a functional structure and then assign a manager for each product. Some employees will have two managers: functional manager and product manager. This type of structure tries to get the benefits of functional structure and also of divisional structure; however, it is not easy to implement because of the dual authority. This structure is very useful for multinational companies.
Henry Fayols 14 Management
Functional, Divisional and Matrix. Focus on the Classical theory of Henry Fayols 14 management principles. Remember at least five. If writing about unity of command, mention about unity of direction. (Show how they are different).
Organisational structure refers to the plan representing the relationships between the jobs and departments in an organisation. There are three main types of organizational structure: functional structure, Divisional structure and Matrix structure.
• Functional structure: The employees are working in departments based on what they are doing, for example, finance department, research department. This structure enhances the experience of each function. This structure saves us money because of the economies of scale. This structure makes the coordination between different departments more difficult than other structures. It also does not allow for flexibility because of the centralization.
• Divisional structure: It divides the employees based on the product/customer segment/geographical location. Each division is responsible for certain product and has its own resources such as finance, marketing, etc. Accordingly, this structure is a decentralized structure and thus allows for flexibility and quick response to changes. It also enhances innovation. It does not support the exchange of knowledge between people working in the same profession because a part of them are working in one division and the others are working in other divisions.
• Matrix structure: It combines both structures. For example, we can have a functional structure and then assign a manager for each product. Some employees will have two managers: functional manager and product manager. This type of structure tries to get the benefits of functional structure and also of divisional structure; however, it is not easy to implement because of the dual authority. This structure is very useful for multinational companies.
Henry Fayols 14 Management