Divisional Structure and Matrix Structure
Divisional Structure
A divisional organisational structure divides a corporation into semi-independent entities or divisions, which are typically key products, markets, or geography. The divisions are mainly autonomous, with structural sub-groups for various organisational responsibilities such as marketing, finance, and production (Fairfield, 2016). Each division is led by a divisional office situated in the main office.
Advantages of Divisional Structure
The divisional structure guarantees that each division can concentrate on its distinctive market or product, which in turn generates demand. Specialization of this nature can contribute to the development of innovation and enhance the quality of the creative innovation that is provided. Businesses can promptly adapt to market changes or trends, and decision-making can be conducted autonomously (Fairfield, 2016). The same can be said for market standing and flexibility through self-regulation. The structure provides accountability by devolving responsibility for profits and losses to the division level.
Disadvantages of Divisional Structure
Divisional structure implies that functional departments within each organisation’s division may require the presetting of equipment, personnel, and facilities. As a result, the organisation may experience increased costs, time consumption, and tension due to the deterioration of comparable resources.
Reasons Underpinning Divisional Structure
A divisional structure allows firms to manage complex operations by creating semi-autonomous entities based on product lines, markets, or locations. This structure encourages responsiveness and adaptation to market changes. Johnson & Johnson, for example, operates under a divisional structure, with activities categorized as consumer health, pharmaceuticals, and medical devices. This technique enables each division to focus on its market demands, speed up decision-making, and retain expert personnel in each field.
Matrix Structure
A matrix structure is generated from two types of structures: functional and divisional structures. Staff members normally have two chains of command: the director of the project or product manager (Goś, 2019). This structure is most commonly employed in organisations that control extensive projects that demand cooperation from functional departments.
Advantages of Matrix Structure
The matrix structure offers the opportunity for efficient resource application. For instance, expertise and personnel can be shared on different projects or products. This flexibility is advantageous in that it enhances efficiency and minimizes operational overheads. The matrix structure ensures that managers have reporting responsibilities to two distinct managers (Goś, 2019). This fosters effective knowledge sharing and adaptation across the functional areas as they address issues and explore opportunities to enhance the organisation.
Disadvantages of Matrix Structure
Implementing a dual reporting system may result in confusion, conflict of interest, and tension, as employees may be subjected to dual masterships from project and functional managers (San Cristóbal et al., 2018). As a result of the coordination and consensus acquisition issues among various managers, the organisation may experience delays in decision-making and may be unable to adjust to market changes.
Reasons Underpinning Matrix Structure
A matrix organisation is characterized by the integration of functional and project-based divisions, which leads to a more efficient allocation of resources and increased flexibility. It is employed to enhance interdepartmental communication and optimize expertise. For instance, Microsoft uses a matrix structure to connect its product development teams with functional departments such as marketing and finance. This structure enables Microsoft to maintain a balance between specialization and cross-functional cooperation, ensuring that products align with the overall corporate objectives and that development is expedited.
