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The highly successful structure of the multi-divisional form for American corporations have provided ways for businesses in other parts of the world to incorporate it into their business models. Although the U-form and H-form were options for the several companies, the fiscal and operational limitations they exhibit allow for the M-form to be ...
When using divisional structures that are organized by either markets or geographic areas they generally have similar functions and are located in different regions or markets. This allows business decisions and activities coordinated locally. The disadvantages of the divisional structure is that it can support unhealthy rivalries among divisions.
Choosing a structure for a company is an important decision and must be strategically thought out because it could either aid or harm the making of business. The structure must also be a good fit for the type of activities, goals, and vision of the company. [3] The organizational structure is a reflection of how conveniently business is conducted.
However, such generic pros and cons are not the basis for choosing the best strategic grouping. An analysis must be completed relative to a specific business strategy. Subsequent phases of organization design include operational design of processes, roles, measures, and reward systems, followed by staffing and other implementation tasks.
Because a division is an internal segment of a company, not an entirely separate entity, business owners create and end divisions at their whim. Also, because individuals in each division are employed by the same company, it's easier to modify staffing to fit with this setup". [7]
A matrix organization. Matrix management is an organizational structure in which some individuals report to more than one supervisor or leader—relationships described as solid line or dotted line reporting, also understood in context of vertical, horizontal & diagonal communication in organisation for keeping the best output of product or services.
Each major product area in the corporation is under the authority of a senior manager who is specialist in, and is responsible for, everything related to the product line. LA Gear is an example of company that uses product departmentalization. Its structure is based on its varied product lines which include women’s footwear etc.
Business strategy drives selection of business models. These business models drive the design of underlying processes and services. Business Analysis is critical: Any number of models can address a strategic imperative. But the best models, services and processes will exploit existing business capabilities (human, IT and physical), the areas where change is possible and the areas where invest