Submitted to:

Amita Das

Assistant Professor

Human Resource Management

Jatiya Kabi Kazi Nazrul Islam

University

Submitted by:
Md. Tanvir Hasan

Roll: 20133035

Student of

Human Resource Management

Jatiya Kabi Kazi Nazrul Islam

University

Jatiya Kabi
Kazi Nazrul Islam University
Trishal, Mymensingh.

Assignment on : Organizational Structure

Course name : Principles Of Marketing

Course Code : HRM-201

Submission date :
 Organizational structure

Organizational structure is the method by which work flows through an organization. It allows
groups to work together within their individual functions to manage tasks.

Organizations are systems created to achieve common goals through people-to-people and
people-to-work relationships. They are essentially social entities that are goal-directed,
deliberately structured for coordinated activity systems, and is linked to the external
environment. Organizations are made up of people and their relationships with one another.
Managers deliberately structure and coordinate organizational resources to achieve the
organization’s purpose.

Each organization has its own external and internal environments that define the nature of the
relationships according to its specific needs. Organizing is the function that managers undertake
to design, structure, and arrange the components of an organization’s internal environment to
facilitate attainment of organizational goals. Organizing creates the framework needed to reach
a company's objectives and goals.

Types of organizational structures:

1. Functional (U-form) Design

2. Conglomerate (H-form) Design
3. Divisional (M-form) Design
4. Matrix Design
5. Hybrid Designs

Let’s we know more about organizational structures:

Functional (U-form) Design: The functional design, also called U-form organization (U
stands for unity), relies almost exclusively on the functional approach to departmentalization.
The U-form design is used to implement a single-product strategy. Because of the emphasis on
functional activities, coordination is extremely important.
 
Some advantages:
The costs of staffing each department with experts is lower than in organizations with other
configurations. U-form design facilitates wide spans of management and allows the CEO to
centralize authority.

Some drawbacks:
U-form design slows decision making. Unit employees may lose sight of overall organizational
goals, and it is difficult for the organization to monitor the performance of individual managers
in the functional areas.

Conglomerate (H-form) Design: The conglomerate, sometimes called a H-form

organization (H stands for holding), relies loosely on product departmentalization with the
various products constituting different businesses.
The H-form design is used to implement a strategy of unrelated diversification.
 

 
Some advantages:
H-form design allows the organization to protect itself from cyclical fluctuations in a single
industry, and the organization can buy and sell its individual businesses with little or no
disruption to those that remain.

Some drawback:
The typical H-form organization is likely to achieve only average-to-weak financial performance.

Divisional (M-form) Design: The divisional design, also called M-form organization, is
similar to the H-form design, but most or all of its businesses are in the same or related
industries.
The M-form design is used to implement a corporate strategy of related diversification. In this
case a firm specializing in mechanical contracting.
 

Some Advantage:
The organization can achieve a great deal of synergy in its operations.

Some drawback:
If the businesses are too closely related, the organization is no longer protected from cyclical
trends.

The Matrix Organization: A matrix organization is a structure in which there is more than
one line of reporting managers. Effectively, it means that the employees of the organization
have more than one boss!
A matrix organization is created by overlaying product-based departmentalization onto a
functional structure. A matrix design is typically used for portions of an organization. Each
member of a matrix organization has a functional 'home' but may be assigned at any given time
to one or more groups working on special projects.

 
Some advantage:
The organization is able to capitalize on the advantages of both functional and product
departmentalization.

Some drawbacks:
The organization lacks a clear chain of command. Project groups may take longer to finish work
and be prone to conflict. The organization has to devote more resources to coordination.
Hybrid designs: Some organizations use a design that represents a hybrid of two or more of
the common forms of organization design.

For example, an organization may have five related divisions and one unrelated division, making
its design a cross between an M form and an H form. Indeed, few companies use a design in its
pure form; most firms have one basic organization design as a foundation for managing the
business but maintain sufficient flexibility so that temporary or permanent modifications can be
made for strategic purposes. Ford, for example, used the matrix approach to design the Focus
and the newest Mustang, but the company is basically a U-form organization showing signs of
moving to an M-form design. As we noted earlier, any combination of factors may dictate the
appropriate form of design for any particular company.

Some Advantages:
The need for a complicated multi-speed transmission and clutch is eliminated in series hybrids
since only the electric motor directly drives the transmission, which may have one gear.
Gasoline engines in series hybrids tend to be smaller and more efficient since they do not
directly power the vehicle and are not subject to the highly variable power demands of stop-
and-go driving These design features make series hybrids the ideal car for urban and suburban
driving conditions. The smaller, more efficient engine and greater use of electric power helps
reduce harmful gas emissions in series hybrids.
Some drawbacks:
The series hybrid requires a larger, more complicated battery and motor to meet its power
needs. The larger battery and motor and the addition of a generator often makes the series
hybrid more costly than a parallel hybrid. Series hybrids are also not as efficient as parallel
hybrids for highway driving since the engine is not directly connected to the wheels (See
Reference 2). Plug-in hybrid models are available in both series and parallel that allow for
electric-only operation and zero tailpipe emissions on shorter distance trips. The plug-in
feature, however, also adds to the cost 

Advantages of Organization Structure:

Merits of having a well-designed organization structure are as follows:
 The activities of the individuals and the groups will become more rational, stable and
predictable.
 An orderly hierarchy in which people are related in a meaningful sequence will result.
Individual responsibility will be known clearly and the authority to act would be defined.
 Individuals will be selected on the basis of ability to perform expected tasks.
Simplification and specialization of job assignment is possible in more effective way.
 Directional and operational goals and procedures will be determined clearly and
energies devoted to their achievement.
 Available resources will be utilized in the most effective way.
 Such an organization may make the treatment of the individual workers more
democratic because patronage is reduced.
 Workers will benefit from planned superior subordinate- relationships in which each
work receives essential support and direction.

Demerits of Organization Structure:

Disadvantages of having an organization structure are as follows:
 Individual creativity and originality may be stifled by the rather rigid determination of
duties and responsibilities.
 Workers may become less willing to assume duties that are not formally a part of their
original assignment.
 Very often the fixed relationships and lines of authority seem inflexible and difficult to
adjust to meet changing needs.
  They produce anxiety in individual workers by pressing too heavily for routine and
conformity.
 They become too costly in terms of time and human dignity in order to implement
organizational rules and regulations.
 Inter-personal communication may be slowed or stopped as a result of strict adherence
to formal lines of communication.
 Organizations tend to fail to account for important differences in workers as human
beings.
 These drawbacks can be reduced through careful planning and efforts by supervisors to
be responsive to human problems created by formal organizational structures. 

Now we are going to discuss about organizational structure of STARBUCKS 

 Starbucks Corporation 

Starbucks Corporation is an American multinational chain of coffeehouses and roastery

reserves headquartered in Seattle, Washington. As the world's largest coffeehouse chain,
Starbucks is seen to be the main representation of the United States' second wave of coffee
culture. As of September 2020, the company had 32,660 stores in 83 countries, including
16,637 company operated stores and 16,023 licensed stores. Of these 32,660 stores, 18,354
were in the United States, Canada, and Latin America. Starbucks locations serve hot and cold
drinks, whole-bean coffee, micro ground instant coffee known as VIA, espresso, caffe latte, full-
and loose-leaf teas including Teavana tea products, Evolution Fresh
juices, Frappuccino beverages, La Boulenger pastries, and snacks including items such as chips
and crackers; some offerings (including the annual fall launch of the Pumpkin Spice Latte) are
seasonal or specific to the locality of the store. Depending on the country, most locations offer
free Wi-Fi.

Headquartered in the Starbucks Center, the company was founded in 1971 by Jerry

Baldwin, Zev Sigel, and Gordon Bowker at Seattle's Pike Place Market. During the early 1980s,
they sold the company to Howard Schultz who – after a business trip to Milan, Italy – decided to
make the coffee bean store a coffeeshop serving espresso-based drinks. Schultz's first tenure as
chief executive, from 1986 to 2000, led to an aggressive expansion of the franchise, first in
Seattle, then across the West Coast of the United States. Despite an initial economic downturn
with its expansion into the Midwestern United States and British Columbia, the company
experienced revitalized prosperity with its entry into California in the early 1990s through a
series of highly publicized coffee wars. Schultz was succeeded by Orin Smith who ran the
company for five years, positioning Starbucks as a large player in fair trade coffee and
increasing sales to $5 billion. Jim Donald served as chief executive from 2005 to 2008,
orchestrating a large-scale earnings expansion. Schultz returned as CEO during the financial
crisis of 2007–08 and spent the succeeding decade growing its market share, expanding its
offerings, and reorienting itself around corporate social responsibility. Kevin Johnson took over
from Schultz in 2017, and continues to serve as the firm's chief executive.
Many stores sell pre-packaged food items, pastries, hot and cold sandwiches, and drinkware
including mugs and tumblers. There are also several select "Starbucks Evenings" locations which
offer beer, wine, and appetizers. Starbucks-brand coffee, ice cream, and bottled cold coffee
drinks are also sold at grocery stores in the United States and other countries. In 2010, the
company began its Starbucks Reserve program for single-origin coffees and high-end coffee
shops. It planned to open 1,000 Reserve coffee shops by the end of 2017. Starbucks operates
six roasteries with tasting rooms and 43 coffee bars as part of the program. The latest roastery
location opened on Chicago's Magnificent Mile in November 2019, and is the world's largest
Starbucks. The company has received significant and sustained criticism about its business
practices, corporate affairs, and role in society. Conversely, its franchise has commanded
substantial brand loyalty, market share, and company value.
The company is ranked 114th on the Fortune 500 and 288th on the Forbes Global 2000.

Organizational structure of Starbucks: Starbucks has a matrix organizational structure,

which is a hybrid mixture of different features from the basic types of organizational structure.
In this case, the structural design involves intersections among various components of the
business. For example, the company’s product-based divisions intersect with functional groups
and geographic divisions, which in turn intersect with other parts of the organization. The
following are the main features of Starbucks Coffee’s corporate structure:

o Functional hierarchy
o Geographic divisions
o Product-based divisions
o Teams

They are described below:

Functional hierarchy: The functional hierarchy feature of Starbucks Coffee’s organizational

structure refers to grouping based on business function. For example, the company has an HR
department, a finance department and a marketing department. These departments are most
pronounced at the top levels of Starbucks’s corporate structure, such as at the corporate
headquarters. This characteristic is hierarchical. For example, the corporate HR department
implements policies applicable to all of the company’s cafés. The functional hierarchy of the
corporate structure facilitates top-down monitoring and control, with the CEO at the top.
Functional groups are responsible for the organization-wide development and implementation
of Starbucks Corporation’s generic competitive strategy and intensive growth strategies.

Geographic Divisions: Starbucks Coffee’s corporate structure involves geographic divisions,

which are based on physical location of operations. The company has three regional divisions
for the global market: (1) Americas, (2) China and Asia-Pacific, (3) Europe, Middle East, and
Africa. Also, in the U.S. market, Starbucks Coffee’s organizational structure involves further
geographic divisions: (a) Western, (b) Northwest, (c) Southeast, and (d) Northeast. Each
geographic division has a senior executive. In this way, each local manager reports to at least
two superiors: the geographic head (e.g. President of Europe, Middle East, and Africa
Operations) and the functional head (e.g. Corporate HR Manager). This feature of Starbucks’s
corporate structure enables closer managerial support for geographic needs. Each division head
is given flexibility in adjusting strategies and policies to suit specific market conditions.

Product-based Divisions: Starbucks has product-based divisions in its organizational structure.

These divisions address product lines. For example, the company has a division for coffee and
related products, another division for baked goods, and another division for merchandise like
mugs. This feature of the corporate structure enables Starbucks to focus on product
development. In this way, the company develops and innovates its products with support
through its organizational structure. Such development provides competitiveness that the
business needs, especially in considering the threats identified in the SWOT analysis of
Starbucks Corporation.

Teams: Teams are used in different parts of Starbucks Coffee’s organizational structure.
However, teams are most visible at the lowest organizational levels, particularly at the
coffeehouses. For example, in each café, the company has teams organized to deliver goods
and service to customers. This feature of Starbucks’s corporate structure enables the business
to provide effective and efficient service to consumers. Team effectiveness is a major
determinant of the financial performance of franchised locations and company-owned
coffeehouses. Starbucks’s corporate culture influences how such team effectiveness is
achieved. The company’s development depends on team-based factors and associated human
resource management strategies.
 matrix organizational structure of Starbucks Corporation.

If we analysis the structure of Starbucks Corporation we can see, under CEO of this company
there are different kinds of managers work.

Kevin Johnson is President & CEO at Starbucks. A passionate servant leader, he proudly carries
on Starbucks legacy of human connection, driving the company’s core strategies for growth,
and being of service to the more than 330,000 partners who wear the green apron around the
world. In hierarchy of Starbuck Kevin Johnson is 1st line Manager. 2nd line manager work under
him.

Rachel Ruggeri was named executive vice president and chief financial officer in 2021. Caroline
Ternes is VP & Transformation at Starbucks. Brady Brewer was named Starbucks chief
marketing officer in 2020, leading the marketing, digital, brand and product functions that
ensure the customer is at the heart of everything Starbucks does. They are 2 nd line manager in
Starbucks.
Now we will know more about matrix organization:

Matrix organization: A matrix organization is created by overlaying product-based

departmentalization onto a functional structure. A matrix design is typically used for portions of
an organization. Each member of a matrix organization has a functional 'home' but may be
assigned at any given time to one or more groups working on special projects.
The matrix organization structure is complex but helps in achieving the ultimate goal reaching
higher productivity. It has various benefits. This type of structure is used in organizations which
have diverse product lines and services.

It breaks the monotony and gives more flexibility to the organization. Employees work with
colleagues of different departments who have their expertise in different functions.

When different people from diverse departments work together, it helps solve problems in a
more efficient way. It does lead to overall development of employees as each one is exposed to
different functions apart from their core job.

Here employees are assigned a job or a project outside their own department for a relatively
temporary period. These teams are made up of people with diverse expertise who have come
together and formed a team to attain a specific goal.

However, there are some challenges as well. In matrix organization structure, ambiguity could
come in, if you (employees) are not sure which manager to report to. This also means that
employees might be confused about their role and responsibility.

Apart from that, in the matrix organizational structure it becomes relatively difficult for the
organization to gauge the employee’s performance on a particular project. The matrix structure
turns out to be a bit more expensive to the organization than the traditional one, because it
employs more managers.

A matrix organizational structure is most commonly used in companies to distribute resources

and workers across multiple operations. This type of structure can have both advantages and
disadvantages within the workplace. Understanding the benefits and downsides of a matrix
organizational structure can help you determine if this type of structure is best for your
company. In this article, we will discuss what a matrix organizational structure is as well as the
advantages and disadvantages of this workplace approach.
What is a matrix organizational structure?
A matrix organizational structure is a workplace format in which employees report to two or
more managers rather than one manager overseeing every aspect of a project. For example, an
employee may have a primary manager they report to as well as one or more project
managers they work under. This type of structure is often useful when skills need to be shared
across departments to complete a task and can allow companies to utilize a wide range of
talents and strengths.

There are three types of matrix organizational structures:

1. Weak matrix organization: This type of matrix organizational structure is most similar to a
traditional workplace hierarchy. A functional manager oversees all aspects of a project and acts
as the primary source of decision making. While there is a project manager who also acts as a
point of authority, they ultimately answer to the functional manager.
2. Balanced matrix organization: In this type of matrix organizational structure, more authority is
given to the project manager. While there is still a functional manager who is the primary
authority, employees also report to the project manager.
3. Strong matrix organization: A strong matrix organization provides the project manager with
equal or more power than the functional manager. The project manager has primary control
over resources and distribution of tasks.

Advantages of matrix organizational structures:

There are several benefits of implementing a matrix organizational structure within the
workplace. These benefits include:

 Increased communication efficiency: A matrix organizational structure allows multiple

departments to easily communicate and collaborate on a project. Because employees
answer to multiple managers as opposed to just the functional manager, issues are
resolved more quickly, and company-wide interaction is increased.
Related: Communication Skills: Definitions and Examples
 Improved employee motivation: In a matrix organizational structure, employees have
much more autonomy and input in projects. This type of structure encourages
employee contribution and places a higher value on workers' point of view.
 Increased teamwork: In a matrix organization, employees work across multiple projects
and with various departments within the company. This increases employee interaction
and promotes a better sense of teamwork.
  Maximizes resource usage: This type of structure allows resources to be maximized
because of how equipment and employees are shared across projects. A matrix
structure also allows project managers to work in the areas of their expertise rather
than being pulled across multiple projects, boosting the overall contribution of their
talents.
 Increased employee professional development: A matrix structure allows employees to
work across a wide variety of projects and often requires them to utilize and/or learn
different skills. Being exposed to various job duties and responsibilities can increase
employee development and enhance their professional skills.

Disadvantages of matrix organizational structures:

While there are many benefits to this type of workplace structure, there are also a few
disadvantages to consider. These include:

 Potential conflict between managers and projects: Because this matrix requires
employees to answer to two or more managers and work on multiple projects, it could
cause workers to become conflicted between managers and projects. Also, because
there are multiple managers in charge, there is the potential for inconsistent managing
directives among teams.
 Authority confusion: Matrix organizational structures employ two or more managers
that employees answer to. This can cause several potential challenges, including
confusion as to who the supervisor is, undefined responsibilities among managers and
the possibility of managers opposing each other's decisions.
 Reduced employee effectiveness: Oftentimes in a matrix organizational structure,
employees are assigned to multiple tasks across a number of projects. This can result in
reduced employee effectiveness and increased ambiguity as employees try to decide
which tasks are most important.
 Increased management overhead costs: This type of organizational structure can be
costly in terms of management since multiple managers are put in place for a project. As
a result, management overhead costs can increase, and the overall company budget can
be impacted.
Reference:

1. Principles of Marketing by Philip Kotler & Gary Armstrong

2. https://www.starbucks.com/
3. https://en.wikipedia.org/wiki/Starbucks
4. Other internet sources.