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Organigram
Organigram
Organisational chart displaying individual jobs, division of
labor and chain of command.
Pros and Cons of
Various Business Structures
Modern Organizational Structure
Loose hierarchy, strongly decentralized decision-making,
highly autonomous individual areas of focus, increased
scalablity.
Complex, highly compartmentalized structure
Employees tend to focus more on their own advancement than on
the task at hand.
Consumer-Oriented Businesses
The customer is the driving force for all processes.
Choosing an Organizational Structure
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
No Structure
Startups and small businesses; founder or owner is the boss.
Highly flexible, dynamic; can be overpowered by rapid growth.
Functional Structure
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
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.
Geographic
Structure
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.
Holding Structure
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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