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  • ENG M 402: Business Organisation - Function Vs Product

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    Mateus Teles
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    The document compares and contrasts organizational structures organized by function versus by product. An organization structured by function groups employees by specialty like sales, engineering, or administration, while one structured by product groups employees working on specific products together. The functional structure allows for more control and specialization but can lead to silos and "us vs them" mentalities, while the product structure fosters teamwork and autonomy but risks duplication and higher oversight costs.

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    Organisation Charts Jan16

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    The document compares and contrasts organizational structures organized by function versus by product. An organization structured by function groups employees by specialty like sales, engineering, or administration, while one structured by product groups employees working on specific products together. The functional structure allows for more control and specialization but can lead to silos and "us vs them" mentalities, while the product structure fosters teamwork and autonomy but risks duplication and higher oversight costs.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    7 views2 pages

    ENG M 402: Business Organisation - Function Vs Product

    Uploaded by

    Mateus Teles
    The document compares and contrasts organizational structures organized by function versus by product. An organization structured by function groups employees by specialty like sales, engineering, or administration, while one structured by product groups employees working on specific products together. The functional structure allows for more control and specialization but can lead to silos and "us vs them" mentalities, while the product structure fosters teamwork and autonomy but risks duplication and higher oversight costs.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    of 2

    ENG M 402

    Business Organisation Function vs Product

    Owner

    Sales

    Admin.

    Product

    Engineering/
    technical

    Figure 1: Org. by Function


    Parameter
    Control
    Specialization
    Autonomy
    Mobility/Chance for promotion
    Interaction
    Team Mentality
    Profit control
    Cost of services
    Cost of oversight

    Advantages
    X (Direct reporting)
    X (Functional departments)

    Disadvantages

    X (Delegated work)
    X (Vertical structure)
    X (Silos)
    X (Us Them mentality)
    X (Work not product)
    X (Centralized)
    X (Few managers)

    Owner

    Product 1

    Product 2

    Product 3

    Product 4

    Figure 2: Org. by Product


    Product group contains: manager/supervisor, maintenance, technical and production staff (may include
    administrative staff also)
    Parameter
    Control
    Specialization
    Autonomy
    Mobility/Chance for promotion
    Interaction
    Team Mentality
    Profit control
    Cost of services
    Cost of oversight

    Advantages

    Disadvantages
    X (delegation)
    X (fragmentation)

    X (Rapid reaction)
    X (similar responsibilities)
    X (different skills)
    X (pride in work)
    X (ownership of process)
    X (duplication)
    X (more managers)

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