| >>Note: Organisational chart displaying individual jobs, division of labor and chain of command. |
| | Pros and Cons of Various Business Structures |
| | Modern Organizational Structure |
| | >>Note: Loose hierarchy, strongly decentralized decision-making, highly autonomous individual areas of focus, increased scalablity. |
| | Complex, highly compartmentalized structure |
| | >>Note: Employees tend to focus more on their own advancement than on the task at hand. |
| | Consumer-Oriented Businesses |
| | >>Note: The customer is the driving force for all processes. |
| | Choosing an Organizational Structure |
| | >>Note: Organizational structure should be geared toward the precise nature of the business (size, age, growth, affiliates, business environment.) |
| | Large, mature companies can repeat successful behavior by formalizing processes. |
| | Very large companies must have a very strong ability to coordinate effort. |
| | Larger companies require larger divisions. |
| | The more dynamic the business environment, the more organic and flexible the business structure required. |
| | The more complex the business environment, the more decentralized the structure required (loose hierarchy.) |
| | Example Organigram (Organizational Chart) |
| | Common Business Structures |
| | >>Note: Startups and small businesses; founder or owner is the boss. Highly flexible, dynamic; can be overpowered by rapid growth. |
| | >>Note: Divided by function: top management, production, marketing, sales and distribution. High level of specialization; very effective for routine tasks. Difficult to coordinate the various functions; responsibility rests heavily on management. |
| | Product-Oriented Structure |
| | >>Note: Structure of company is determined by product groups and business divisions. Clear responsibility for individual scope of activity. Difficult to focus on tasks affecting the entire organization. Administration-intensive, plagued by redundancy. |
| | >>Note: Directed at regional submarkets. Business strategy applied to regional ideosyncracies. Clear picture of who is responsible for results. Requires additional levels of hierarchy, difficult to achieve corporate identity. |
| | >>Note: Highly diversified, multinational concerns. The parent organization focuses on few tasks, mostly administrative in nature. Allows spreading loss within the group, favorable financing opportunies. Little top-level expert knowledge, not synergistic, difficult to manage. |
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