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Vertical Functional Structure
People are grouped together in departments by common skills and work activities, such as in an engineering department and an accounting department.
Departments are grouped together into separate, self-contained divisions based in a common product, program, or geographical region. Diverse skills rather than similar skills are the basis of departmentalization.
Types of Departmentalisation
found in organisations:
Vertical Functional
Divisional
Matrix
Team based
Network
Cons
Poor Communications across functional departments
Slow response to external change, laggin innovation
Decision concentrated at top of hierarchy, creating delay
Pros
Efficient Use of resources; Economies of scale
In depth skill specializations and development
Top manager direction and control
Departmentalisation is the basis on which
individuals are grouped into departments
and departments into the total organisation
Cons
Duplication of recourses across divisions
Less technical depth and specialization
Poor coordination across divisions
Pros
Fast response, flexibility in unstable environment
Fosters concern for customer needs
Excellent coordination across functional departments
The Matrix is a hybrid structure in which two or more forms of departmentalization are used together.
In the matrix structure:
The most common forms of Matrix Departmentalisation's are used in Product and Functional forms
There are also two (2) types of Matrix Departmentalisation:
Simple - managers in different parts of the matrix negotiate conflicts and resources directly
and
Complex Matrix - specialized matrix managers and department are added to the organizational structure; managers from different parts of
the matrix might report to the same matrix manager, who helps them sort out conflicts and problems
Pros
More efficient use of recourses than single hierarchy
Flexibility, adapt ability to changing environment
Interdisciplinary cooperation, expertise available to all divisions
Cons
Frustration and confusion from dual chain of command
High conflict between two sides of the matrix
Many meetings, more discussion than action
The organization creates a series of teams to accomplish specific tasks and to coordinate major departments.Teams can exist from the office of the president all the way down to the shop floor.
Pros
Reduced barriers among departments, increased compromise
Shorter response time, quicker decisions
Better morale, enthusiasm from employee involvement
Cons
Dual loyalties and conflict
Time and resources spent on meetings
Unplanned decentralization
A network organisational structure is a system of allocation and the coordination of tasks between
more than one organisation, which is aimed at producing a good or service.
A network organisational structure usually involves more than one organisation working together to produce a particular product. It allows a business to partner with others in the achievement of its goals and objectives.
‘It is what you do before you do something;
so that when you do it, it is not all mixed up’
Functional Departmental structures are no longer the most
appropriate structures for today’s forward thinking organisation,
when compared with Matrix and Team based structures.
Do you agree?
On completion of this workshop you should be able to:
▪ Discuss the fundamental characteristics of Organising
▪ Understand what Departmentalisation is
▪ Identify the five (5) types of Departmentalisation & their
pros and cons
▪ Decipher whether functional structures are more appropriate
than matrix and team based structures in today's society
Tamika Smith
Sheldon Thomas
Zaid Hamil