Chap 6.pdf

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San Jose State University
BUS3 161B
Declineto State

Chapter 6 - Designing Organizational Structure: Specialization and Coordination Functional Structure 1. Functional Structure: a design that groups people on the basis of their common skills, expertise or resources they use ɾa bedrock of horizontal differentiation 2.Advantages ɾopportunity to learn from one another an become specialized an productive ɾsince all common skills they are most effective ɾppl supervise each other an meet work schedules ɾppl develop norms/value that increase effectiveness/loyalty from working closely 3. Control Problems in a Functional Structure ɾCommunication - departments become distant and unable to respond to change quickly ɾMeasurement - can't allocate separate costs across all septs, so can't tell if co meeting goals ɾLocation - too many locations = unable to coordinate ɾ Customer - inability to quickly identify customer needs ɾStrategy - working on daily issues prevents managers from focusing on long term goals 4. Solution ɾRedesign functional structure to increase integration 5. When a company expands they can: increase vertical diff, horizontal diff, integration (task force teams) Divisional Structure 1. Divisional Structure: a structure in which functions are grouped together according to specific demands of products, markets, customers 2. Types of Product Divisional Structure ɾProduct Division: centralized support functions when products are similar and target the same market ɾMultidimensional Structure: appropriate if products are diff and sold in many markets - self contained with own support function/control ɾProduct Team Structure: hybrid of the two, structure customizes products, speed dev time an reduce costs 3. Geographic Structure ɾWhen control issues arise are a function of geography they create new dept to meet needs of customers in region
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