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CONTI…
Traditional Organizational Structure
1.c. Divisional Structure
It is an organizational structure made up of separate business units or
divisions.
In this structure, each division has limited autonomy, with a division manager
who has authority over his/her unit and is responsible for performance.
In divisional structures, however, the parent corporation typically acts as an
external overseer to coordinate and control the various divisions, and it
often support services such as financial and legal services.
Wal-Mart, for example, has two divisions: Retail (Wal-Mart Stores,
International, Sam’s Clubs, and others) and Support (Distribution Centres).

CONTI…
Advantages of Divisional Structure
• Focuses on results.
• Division managers are responsible for what happens to their products
and services.
Disadvantages of Divisional Structure
• Duplication of activities and resources increase costs.
• Duplication of activities and resources reduce efficiency.

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CONTI…
Contemporary Organizational Structure
2.a. Team Structure
A team structure is one in which the entire organization is made up of work teams
that do the organization’s work.
In this structure employee empowerment is important because there is no line of
managerial authority from top to bottom.
Rather, employee teams design and do work in the way they think is best, but they
are also held responsible for all the work performance results in their respective
areas.
In large organization, the team structure complements what is typically a
functional or divisional structure.
Example: Amazon, Hewlett-Packard, Louis Vuitton, Motorola and Xerox extensively
use employee teams to improve productivity.

CONTI…
Advantages of Team Structure
• Employees are more responsible and involved.
• Empowers the employees.
Disadvantage of Team Structure
• No clear chain of command.
• Pressure on teams to perform.

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CONTI…
Contemporary Organizational Structure
2.b. Matrix and Project Structure
Matrix Structure, specialists from different functional departments
work on projects that are led by a project manager.
It creates dual chain of command, in which employee have two
managers – their Functional area manager and their Project manager –
who share authority.
Each manager has his roles and responsibilities and to work effectively,
both managers have to communicate regularly, coordinate work
demands on employees and resolve conflicts together.

CONTI…
Project Structure, has no formal departments where employees return at
the completion of a project.
Instead employees take their specific skills, abilities, and experiences to
other projects. Also all work in project structure is performed by teams of
employees.
There is no departmentalization or rigid organizational hierarchy to slow
down making decisions or taking actions.
In this structure managers serves as facilitators, mentors and coaches.
They eliminate or minimize organizational obstacles and ensure that teams
have resources they need to effectively and efficiently complete their work.

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CONTI…
Advantages of Matrix and Project Structure
• Fluid and flexible design that can respond to environmental changes.
• Faster decision making.
Disadvantages of Matrix and Project Structure
• Complexity of assigning people to projects.
• Task and personality conflicts.

CONTI…
Contemporary Organizational Structure
2.c. The Virtual Organization
Virtual Organization (a.k.a. network/modular organization) consists of
small core of full-time employees and outsources its major business
functions.
Example: Sweden’s Ericsson contracts its manufacturing and even
some of its R&D to more cost-effective contractors in New Delhi,
Singapore, California and other global locations.

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CONTI…
Advantages of the Virtual Structure:
• Highly flexible and responsive.
• Utilizes talent wherever its found.
Disadvantages of the Virtual Structure:
• Lack of control. (roles, goals, and responsibilities are unclear)
• Setting the stage for increased political behavior.

CONTI…
Contemporary Organizational Structure
2.D. TELECOMMUTING:
It allows employees to work at home and be linked to the workplace
by computer.
Advantage for employees: no commutes, no colleague interruptions,
and an opportunity to better balance work and personal lives.
Advantages for employers: reduces office expenses plus the potential
to attract employees who otherwise wouldn't be available because of
family responsibilities or physical disabilities.