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Multiple-part Case on Organizational Structure

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1. "Among the weaknesses of the divisional structure is the duplication of activities and potential of counter-productive inter-market competition for customers, which is not only inefficient but can limit opportunities for cooperation across market segments and waste resources." This statement applies to conglomerate organizations. Can you think of a form of structure that is better suited to multiproduct, multiservice companies? Defend your answer.

2.Address the following questions and also provide the name of a company example of each structure with supporting rationale..
1. What kinds of companies should employ the simple structure organizational configuration?
2.What kind of companies should use the machine bureaucracy form of structure?
3.What kinds of organizations should feature a professional bureaucracy form of structure?
4.What kinds of firms should use the divisional form of structure?
5.What types of organizations are best suited to the adhocracy form of structure?

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Solution Summary

This case looks at weaknesses in divisional structure, how duplication of effort is counter-productive, along with analyzing bureaucracy. The solution is over 600 words and includes multiple references.

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1. Divisional structure has a managerial hierarchy for each product type. For example, Product 1 may have a Vice President that oversees all functions, with employees serving in human resource, information technology and manufacturing capacities. This same structure is duplicated with Product 2; with all the Vice President level positions reporting to the President or Chief Executive Officer (CEO). The main criticism with this structure is the duplication in positions. It may not be efficiently, nor cost effective, to have support staff (human resources, clerical, finance) for each product.
The structure better suited to multi-product or multi-service companies is functional. In this scenario, the hierarchy is based on function rather than product. An example would be having Vice President positions in the job functions of manufacturing, human resources, advertising, etc. These individuals report to the President or CEO. This structure provides for more efficiency by removing duplicate positions. For example, the hiring process amongst product type likely does not deviate from one job to another. The prospective candidates will ...

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