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Organizational Structures Guide

This document discusses and compares different organizational structures including divisional, matrix, strategic business unit, and holding company structures. A divisional structure groups products, projects, or markets internally and gives divisional executives control over objectives and performance. A matrix structure combines functional and divisional reporting where individuals report to multiple managers. It increases responsiveness but can also cause uncertainty and conflicts. The document provides examples of Intel's and Nike's uses of divisional and matrix structures.

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Klyne Ally Peralta
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792 views22 pages

Organizational Structures Guide

This document discusses and compares different organizational structures including divisional, matrix, strategic business unit, and holding company structures. A divisional structure groups products, projects, or markets internally and gives divisional executives control over objectives and performance. A matrix structure combines functional and divisional reporting where individuals report to multiple managers. It increases responsiveness but can also cause uncertainty and conflicts. The document provides examples of Intel's and Nike's uses of divisional and matrix structures.

Uploaded by

Klyne Ally Peralta
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
  • Divisional & Matrix Structure Overview: Provides an introduction to divisional and matrix organizational structures, including definitions, advantages, and disadvantages.
  • Divisional Structure: Explains the divisional structure, its advantages and disadvantages, and provides an example with Intel's divisions.
  • Matrix Structure: Explains the matrix structure, highlighting its advantages and disadvantages, and offers real-world examples like the Nike matrix organization.

Divisional & Matrix Structure

Definition, Advantages & Disadvantages

TRADITIONAL FORMS OF ORGANIZATIONAL STRUCTURE


Simple

Matrix

Org Structure

DIVISIONA L

Function al

DIVISIONAL STRUCTURE

A.k.a. multidivisional / M-form

An organizational form in which products, projects, or product markets are grouped internally.
*Divisional executives determine: 1. Product market and financial objectives 2. Divisions contribution to overall corporate performance

DIVISIONAL STRUCTURE
1.

2. 3.

4.
5.

Advantages: Increases strategic and operational control, permitting corporate-level executives to address strategic issues Quick response to environmental changes Increases focus on products and markets Minimizes problems associated with sharing resources and functional areas Facilitates development of general managers

DIVISIONAL STRUCTURE
Disadvantages: 1. Increased costs 2. Dysfunctional competition among divisions may detract from overall corporate performance 3. Difficult to maintain uniform corporate image 4. Overemphasis on short-term performance

DIVISIONAL STRUCTURE

Lets take a look at an example

INTELs DIVISIONS (2008)


Digital Enterprise largest Flash Memory Digital Home Mobility Digital health Channel Platforms

DIVISIONAL STRUCTURE

Variations: Strategic Business Units Holding Company Structure

STRATEGIC BUSINESS UNIT (SBU) An organizational form in which products, projects, or product market divisions are grouped into homogeneous units.

STRATEGIC BUSINESS UNIT (SBU)


More related businesses, fewer SBUs Each SBU operates as a profit center

ADVANTAGES
More

DISADVANTAGES
Difficulty

manageable planning and control Individual businesses can react more quickly to changes in the environment

of achieving synergies across SBUs Increased expenses Corporate office is further from divisions

STRATEGIC BUSINESS UNIT (SBU)

DIVISIONAL STRUCTURE

Variations: Strategic Business Units Holding Company Structure

HOLDING COMPANY STRUCTURE An organizational form in which the divisions have a high degree of autonomy both from other divisions and from corporate headquarters.

ADVANTAGES
Cost

DISADVANTAGES

savings Autonomy Inherent lack of increases control and motivational level dependence of divisional Very little bench executives; strength enables them to If problems arise, respond quickly to may be difficult to market turn around opportunities and HOLDING COMPANY STRUCTURE individual threats
businesses

TRADITIONAL FORMS OF ORGANIZATIONAL STRUCTURE


Simple

Function al

Org Structure

MATRIX

Divisional

MATRIX STRUCTURE
an organizational form in which there are multiple lines of authority and some individuals report to at least two managers.

Combination of functional & divisional structures

MATRIX STRUCTURE
Advantages: 1. Increases market responsiveness through collaborations & synergies among professional colleagues 2. Allows more efficient utilization of resources 3. Improves flexibility, coordination & communication 4. Increases professional development through a broader range of responsibility

MATRIX STRUCTURE
Disadvantages: 1. dual-reporting relationships can result in uncertainty regarding accountability 2. Intense power struggles may lead to increased levels of conflict 3. Excessive reliance on group processes and teamwork may impede timely decision making

MATRIX STRUCTURE

Lets take a look at an example

MATRIX STRUCTURE

Nike Matrix Organization Regions


(before 2009 Financial Crisis) Corporate Functions:
HR/Finance/IT/Et c.

USA

Europe

Asia/ Pacific

The America s

Footwear
Product Type

Apparel

Equipmen t

Nike Matrix Organization


(Post 2009 Financial Crisis)
Corporate Functions:
HR/Finance/I T/Etc.
North America

Geographic Locations Eastern Western China


Europe Europe

Japan

Emerging Markets

Categories Running Soccer Basketball Training


Wms Fitness Sports Culture

Other

Divisional & Matrix Structure Definition, Advantages & Disadvantages
TRADITIONAL FORMS OF ORGANIZATIONAL STRUCTURE Org Structure Simple DIVISIONA L Function al Matrix
DIVISIONAL STRUCTURE A.k.a. “multidivisional” / “M-form” ◦An organizational form in which products, projects, or product
DIVISIONAL STRUCTURE Advantages: 1. Increases strategic and operational control, permitting corporate-level executives t
DIVISIONAL STRUCTURE Disadvantages: 1. Increased costs 2. Dysfunctional competition among divisions may detract from ove
DIVISIONAL STRUCTURE Let’s take a look at an example…
INTEL’s DIVISIONS (2008) Digital Enterprise – largest Flash Memory Digital Home Mobility Digital health Channel P
DIVISIONAL STRUCTURE Variations: Strategic Business Units Holding Company Structure
STRATEGIC BUSINESS UNIT (SBU) ◦An organizational form in which products, projects, or product market divisions are gro
STRATEGIC BUSINESS UNIT (SBU) More related businesses, fewer SBUs Each SBU operates as a profit center

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