Inglés Comercial I Docente: Prof.

Verónica Ferrari

Unit 3
Company Structures

An organizational structure is defined as “a system used to define a hierarchy within an

organization. It identifies each job, its function and where it reports to within the
organization.” A structure is then developed to establish how the organization operates to
execute its goals.

Most companies are made up of three groups of people: the stakeholders (who provide the
capital), the management and the workforce. This is called the hierarchical
organisational structure.
There are many types of organizational structures.
The more traditional: Functional structure, then the divisional structure, the matrix
structure and the flatarchy structure. Each organizational structure comes with different
advantages and disadvantages and may only work for companies or organizations in certain
situations or at certain points in their life cycles.

Types of Organizational Structure

Functional Structure

The functional structure is based on an organization being divided up into smaller groups
with specific tasks or roles. For example, a company could have a group working in
information technology, another in marketing and another in finance.

Each department has a manager or director who answers to an executive a level up in the
hierarchy who may oversee multiple departments. One such example is a director of

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Inglés Comercial I Docente: Prof. Verónica Ferrari

marketing who supervises the marketing department and answers to a vice president who is
in charge of the marketing, finance and IT divisions.

An advantage of this structure is employees are grouped by skill set and function, allowing
them to focus their collective energies on executing their roles as a department.

One of the challenges this structure presents is a lack of inter-departmental communication,

with most issues and discussions taking place at the managerial level among individual
departments. For example, one department working with another on a project may have
different expectations or details for its specific job, which could lead to issues down the road

Divisional Structure

Larger companies that operate across several horizontal objectives sometimes use a
divisional organizational structure. This structure allows for much more autonomy among
groups within the organization.
One example of this is a company
like General Electric. GE has
many different divisions including
aviation, transportation, currents,
digital and renewable energy,
among others.

Under this structure, each division

essentially operates as its own
company, controlling its own
resources and how much money it spends on certain projects or aspects of the division.

Matrix Structure

In the matrix structure, employees

may report to two or more bosses
depending on the situation or
project. For example, under
normal functional circumstances,
an engineer at a large engineering
firm could work for one boss, but a
new project may arise where that
engineer’s expertise is needed.
For the duration of that project, the
employee would also report to that
project’s manager, as well as his
or her boss for all other daily
tasks.

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Inglés Comercial I Docente: Prof. Verónica Ferrari

The matrix structure is challenging because it can be tough reporting to multiple bosses and
knowing what to communicate to them. That’s why it’s very important for the employees to
know their roles, responsibilities and work priorities.

Advantages of this structure is that employees can share their knowledge across the
different functional divisions, allowing for better communication and understanding of each
function’s role. And by working across functions, employees can broaden their skills and
knowledge, leading to professional growth within the company.

Flatarchy

While the previous three types of organizational structures may work for some
organizations, another hybrid organizational structure may be better for startups or small
companies.

The best example of this structure within a company is if the organization has an internal
incubator or innovation
program. Within this system,
the company can operate in an
existing structure, but
employees at any level are
encouraged to suggest ideas
and run with them, potentially
creating new flat teams.

A benefit of this system is it

allows for more innovation
company-wide, as well as
eliminating red tape that could
stall innovation in a functional
structure. As for the negatives, the structure could be confusing and inconvenient if
everyone involved doesn’t agree on how the structure should be organized.

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Inglés Comercial I Docente: Prof. Verónica Ferrari

Unit 3: The Company - Structure

Starbucks Organisational Structure & Culture
Introduction
Starbucks Coffee Company is the largest coffeehouse chain in the world. The firm’s industry
leadership is partly attributed to the appropriateness of its organisational structure. A company’s
organisational structure influences management and leadership, communication,
change, and other variables critical to business success. Starbucks has evolved to
have an organisational structure that matches current business needs. This
organisational structure is unique to Starbucks, although it can be characterized
based on a conventional typology of organisational structures. Starbucks succeeds
because its organisational structure grows with the business, enabling the company to optimize
processes and the quality of its goods and services.
Features of Starbucks Coffee’s Organisational Structure
Starbucks has a matrix organisational structure, which is a hybrid mixture of different features from
the basic types of organisational 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:
• Functional structure
• Geographic divisions
• Product-based divisions
• Teams

Organisational structure
Functional Structure. The functional structure feature of Starbucks Coffee’s organisational 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 Coffee’s organisational structure, such as at the corporate headquarters. This
feature relates with hierarchy in the organisational structure of Starbucks. For instance, the corporate
HR department implements policies applicable to all Starbucks cafés. The functional structure
feature of the firm’s organisational structure facilitates top-down monitoring and control, with the
CEO at the top.
Geographic Divisions
Starbucks Coffee’s organisational structure also involves geographic divisions. At present, the
company has three regional divisions for the global market: (a) China and Asia-Pacific, (b) Americas,
and (c) Europe, Middle East, Russia, and Africa. Also, in the U.S. market, Starbucks Coffee’s
organisational structure involves further geographic divisions: (a) Western, (b) Northwest, (c)
Southeast, and (d) Northeast. Each geographic division has a senior vice president. In this way,
each Starbucks manager reports to two superiors: the geographic head (e.g. President of U.S.
Operations) and the functional head (e.g. Corporate HR Manager). This feature of Starbucks
Coffee’s organisational structure supports closer managerial support for geographic needs. Each
division head is given a high degree of flexibility in adjusting strategies and policies to suit specific
market conditions.

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Inglés Comercial I Docente: Prof. Verónica Ferrari
Product-based Divisions
Starbucks also uses product-based divisions in its organisational structure. These divisions address
product lines. For example, Starbucks has a division for coffee and related products, another division
for baked goods, and another division for merchandise like mugs. This feature of the firm’s
organisational structure enables focus on certain product lines. In this way, Starbucks effectively
develops and innovates its products with support from its organisational structure.
Teams
Teams are used in different parts of Starbucks Coffee’s organisational structure. However, teams
are most notable at the lowest organisational levels, particularly the Starbucks cafés. In each café,
the firm has teams organized to deliver goods and service to customers. This feature of Starbucks
Coffee’s organisational structure enables the company to provide effective and efficient service to
consumers.

The main functional areas within business organisations

Human resources

The human resources department is responsible for handling all aspects of a business' employee life
cycle, including their recruiting, hiring and offering assistance for any issues they may experience
during employment. This department focuses on assisting all business personnel with training,
development, compensation, relations, benefits and legal compliance. Typically, a human resources
department within a business does the following:

✓ Recruits staff members

✓ Maintains employee records
✓ Secures benefits for employees
✓ Trains staff members
✓ Ensures business adheres to legal rules and guidelines.
✓ Plans employee engagement and reward programs
✓ Facilitates employee performance reviews
✓ Oversees workforce safety
✓ Creates business policies
✓ Performs onboarding processes
✓ Forms and maintains relationships with insurers

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Inglés Comercial I Docente: Prof. Verónica Ferrari
✓ Operations management department
✓ Liaise with staff associations or trade unions which represent the workforce

The operations management

The Operations Management department of a business oversees the planning, organization,

production and manufacturing of a business. This department primarily focuses on the delivery of
programs, products or services and emphasizes the end-goal as its most important task. Typically,
the operations management department within a business does the following:

▪ Creates strategies to improve operations performance

▪ Assists the human resources department with recruiting
▪ Searches for opportunities in which the businesses can participate
▪ Develops policies or guidelines for business
▪ Creates and promotes company culture
▪ Oversees business plans
▪ Creates short-term and long-term goals for operations
▪ Monitors business' compliance with legal rules and guidelines
▪ Researches the market for ideas in order to grow or to develop
▪ Supports communication between management, staff members and other departments
▪ Holds meetings with board of directors, if applicable, to discuss business plans

Information technology department

The information technology department, commonly referred to as the IT department, ensures that a
business's network of computers and other technology operates correctly. The IT department
focuses on maintaining the computer infrastructure, holding governance over the entire business's
use of technology and ensuring the functionality of all systems in use. Typically, an information
technology department within a business does the following:

Implements new software

Trains business employees on how to use software, programs and technology
Performs software updates
Oversees data and information storage
Installs hardware
Acts as a technology consultant for all business departments
Troubleshoots computer or network issues
Installs new software and IT supplies
Performs system backups
Configures work phones and mobile devices
Installs cloud-based services and applications
Maintains business website
Repairs hardware
Maintains business' internal network

Marketing department

The marketing department of a business promotes said business and all that it has to offer to the
public and prospective customers. It's common for businesses to combine their sales and marketing
departments into one larger department due to their similar goals. The exact responsibilities of a
marketing department, therefore, can vary from business to business. Typically, a marketing
department within a business does the following:
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Inglés Comercial I Docente: Prof. Verónica Ferrari

❖ Develops marketing campaigns

❖ Conducts market research
❖ Manages company brand
❖ Writes content for marketing materials
❖ Maintains business' website (Together with IT Department)
❖ Develops social media marketing strategies and campaigns
❖ Collaborates with other departments to market products accurately
❖ Identifies target audiences
❖ Writes email campaigns
❖ Uses search engine optimization (SEO) tactics for website (SEO means the process of
improving your website to increase its visibility in Google, Microsoft Bing, and other search
engines)
❖ Reviews marketing campaigns
❖ Manages relationships with marketing partners
❖ Researches customer demographic information

Sales

The sales department of a business facilitates and secures a business' sales to generate and
maximize revenue. This department determines sales prices and changes them as needed to sell
the most of any product, program or service. Typically, a sales department within a business does
the following:

• Facilitates the sales of the company’s products/services

• Sets prices for products/services
• Creates sales plans
• Develops strategies for increasing sales
• Creates relationships with sales partners
• Reviews sales plans results
• Manages inventory of products
• Provides customer service
• Creates goals for the department to reach
• Develops distribution plans
• Creates promotional materials
• Maintains relationships with sales partners
• Collaborates with the marketing department to promote items

Accounting and finance departments

The accounting and finance department of a business handles all aspects of a business's finances.
Typically, the accounting department and the finance department within a business have the same
tasks and goals. It's common for businesses to pair their finance and accounting departments
together to create a combined department so they can share resources and create efficiencies.
Typically, an accounting finance department within a business does the following:

 Produces invoices, checks payments are received and chases up overdue payments
 Records money received
 Checks and pays invoices received
 Offers financial advice to other departments
 Creates funding plans
 Supervises inflow and outflows of business funds

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Inglés Comercial I Docente: Prof. Verónica Ferrari

 Manages payroll
 Identifies financial risks
 Collaborates with other departments to determine their specific financials
 Creates financial risk management plans
 Performs bookkeeping
 Prepares budgets
 Manages all finance-related systems
 Produces the statutory accounts each year

Production, research and development department

The production, research, and development department of a business conducts research on

programs, products or services a business may offer. Usually, only larger businesses have this type
of department. Typically, the production, research and development department within business
does the following:

o Conducts market research

o Performs product research
o Creates development plans
o Designs products
o Conducts product tests
o Reviews reports on products
o Analyzes processes for development
o Engages in quality control and assurance
o Collaborates with sales and marketing departments

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Inglés Comercial I Docente: Prof. Verónica Ferrari

Unit 3 – Practice
Listening #1
Isaac Cody is on a visit to Milan. Piera Macaluso introduces him to some colleagues. Listen
to the dialogues and write down what they do.

WILLIAM BERNSTEIN
MARIANA TARDELLI
CARLA DENDENA
GIANNI BARESI
DANIEL JONES
ERIKA CHANG
FRANK JENSCH

Listening # 2
At a budget meeting four managers talk about their department. Listen and complete the
grid below

1 2 3 4
Department Human Resources

Staff 12 (5+7)

Office Large, Open-plan

Ground-floor

Activity Software research

Other Information

Listen again and complete these sentences.

1) We _______ a ________ with _________ companies in the USA, so we ________ a lot
of our ______ on ________.

2) We are ________for _____ purchases, raw material, components, and other _________

3) _______ _________ six _______ _______ in the department, plus the director.

4) We are _______ ______ _______ internal and external communication

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Inglés Comercial I Docente: Prof. Verónica Ferrari

The Company – Functional Areas - Vocabulary

Describing the activity of a department

deals with

My department marketing, administration.

is responsible for

tests

We organise studies

research

customers

We work with Suppliers

Subsidiaries

other companies in the group

Describing the staff of a department

There are … people in the department/our area

John is in charge of the department. He is not in charge of RRHH
She deals with new customers. She doesn’t deal with suppliers

Describing the equipment / premises of a department

We have a large office / three laboratories / a small building

We use computers / e-mail a lot

The company has a well-equipped laboratory / a lot of technical equipment

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Inglés Comercial I Docente: Prof. Verónica Ferrari

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