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Comparison of Business Structures

The document compares four main types of organizational structures: functional, divisional, matrix, and network. It provides information on key dimensions like division of labor, coordination mechanisms, decision rights, boundaries, importance of informal structure, basis of politics, and relative advantages and disadvantages. Specifically, it notes that functional structures have hierarchical supervision and centralized decision-making but poor adaptability. Divisional structures separate strategy and execution with more decentralized decision-rights and better adaptability. Matrix structures use dual reporting relationships and shared decision-making across interfaces. Network structures rely on cross-functional teams, knowledge/resources, and porous, shifting boundaries.

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Manu Jain
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42 views4 pages

Comparison of Business Structures

The document compares four main types of organizational structures: functional, divisional, matrix, and network. It provides information on key dimensions like division of labor, coordination mechanisms, decision rights, boundaries, importance of informal structure, basis of politics, and relative advantages and disadvantages. Specifically, it notes that functional structures have hierarchical supervision and centralized decision-making but poor adaptability. Divisional structures separate strategy and execution with more decentralized decision-rights and better adaptability. Matrix structures use dual reporting relationships and shared decision-making across interfaces. Network structures rely on cross-functional teams, knowledge/resources, and porous, shifting boundaries.

Uploaded by

Manu Jain
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd

A comparison of Different Organization Structures

Functional Divisional Matrix Network


DIVISION By Inputs By Outputs By Inputs & By Knowledge
OF LABOR Outputs
COORDUNA Hierarchical Division general Dual reporting Cross-
TION supervision, plans manager & corporate relationship functional
MECHANIS & procedures staff teams
M
DECISION Highly Separation of Strategy Shared Highly
RIGHTS centralized & execution decentralized

BOUNDARIE Core/periphery Internal/External Multiple Porous &


S markets Interfaces changing
IMPORTANC Low Modest Considerable High
E OF
INFORMAL
STRUCTURE
POLITICS Inter-functional Corporate – division & Along matrix Shifting
Interdivisional dimensions coalitions

BASIS OF Positional & General management Negotiating Knowledge &


AUTHORITY functional responsibility & skills & resources
A relative advantages and disadvantages of Different Structures
Functional Divisional Matrix Network
RESOURCE Excellent Poor Moderate Good
EFFICIENCY
TIME Poor Good Moderate Excellent
EFFICIENCY
RESPONSIVENES Poor Moderate Good Excellent
S
ADAPTABILITY Poor Good Moderate Excellent

ACCOUNTABILI Good Excellent Poor Moderate


TY
ENVIRONMENT Stable Heterogeneous Complex Volatile
FOR WHICH Environmen Environment environment environment
BEST SUITED t with multiple
demands

STRATEGY FOR Focused Diversified Responsiveness Innovative Strategy


WHICH BEST /low cost strategies strategy
SUITED strategy
The virtual network approach
Examples
Virtual network structure means that the firm subcontracts most
of its major functions to separate companies and coordinates
their activities from a small headquarters organization.
Example-----I
Indian telecom company Bharti Tele –Ventures Ltd. Outsources
everything except marketing and customer management.
Example-----II
In the music Industry Vivendi Universal and Sony have formed
network of alliances with Internet service providers, digital
retailers, software firms and other companies to bring music
customers in new ways
Comparison of Structural Approach

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