Functional Organization

1
Functional Organization

• Advantages
• Promotes skill specialization
• Reduces duplication of scarce resources
• Facilitates communication within expertise
• Disadvantages
• Emphasizes routine tasks
• Fosters parochial perspectives by managers
• Obscures accountability for outcomes
• Contingencies
• Stable and certain environment
• Small to medium size
• Routine technology
• Goals of efficiency and technical Quality

2
Divisional Organization

• Advantages
• Recognizes interdepartmental dependencies
• Fosters an orietnation to ward overall outcomes
• Allows diversification expansion of skills
  training
• Ensures accountability through delegation of
  authority
• Disadvantages
• May use skills and resources inefficiently
• Limits career advancement outside of departments
• Impedes exposure to others within the same
  specialties
• May promote departmental, rather than
  organizational objectives
• Contingencies
• Unstable and uncertain environments
• Large size
• Technological interdependence
• Goals of product specialization innovation

3
Matrix Organization

• Advantages
• Makes specialized functional knowledge available
  to all projects
• Uses people flexibly, because departments
  maintain reservoirs of specialists
• Provides mechanisms for dealing with legitimate,
  multiple sources of power
• Can adapt to environmental changes
• Disadvantages
• Can be difficult to introduce without preexisting
  climate
• Increases role ambiguity, role conflict
• Without power balancing, lowers performance
• May reward political skill, not technical skill
• Contingencies
• Dual focus on unique product demands
• Pressure for high information capacity
• Pressure for shared resources

4
Process Based Structure

• Advantages
• Focus on customer satisfaction
• Improves speed and efficiency
• Adapts to environmental change rapidly
• Lowers costs because of lowers overhead
• Enhances employee involvement
• Disadvantages
• Can threaten middle managers
• Requires a change in command and control mindsets
• Duplicates scarce resources
• May take longer to make decisions
• Contingencies
• Uncertain and changing environments
• Moderate to large size
• Nonroutine and highly interpendent structures
• Customer orientation

5
Network Structure

• Advantages
• Highly flexible and adaptive to dynamic
  environments
• Creates a best of the best organization to focus
  on resources
• Enables each organization to leverage a
  distinctive commpetency
• Permits rapid global expansion
• Can produce synergistic results
• Disadvantages
• Managing lateral relations across autonomous
  organizations is difficult
• Motivating members to relinquish autonomy to join
  network
• Sustaining membership is problematic
• May give partners access to proprietary
  technology/info
• Contingencies
• Highly complex and uncertain environments
• Organizations of all sizes
• Goals of specialization and innovation
• Worldwide operations
• Highly uncertain technologies