Organizational Structure Types

• Organizational structure is the system by which a group of individuals achieve desired goals.
• Factors like technology, customer lifestyles, and the environment influence it.
• Companies need flexibility to adapt to changing conditions.

Types of Organizational Structures

• Organizational charts vary among successful companies.
• Structures may be functional, territorial, product-centered, market-centered, or matrix.

Functional Organizational Structures

• Organizations adopt structures for specific reasons.
• Management should know goals, skills, resources, and constraints.
• It requires bringing together human, technical, marketing, and financial resources.
• Job specialization is optimized by bringing human resources together in units, teams, or projects.
• Departments like marketing, production/operations, and finance should work collaboratively.

Territorial Organizational Structure

• Territorial structure is suitable for organizations serving customers over a growing geographic area.
• The target market is divided geographically.
• Personnel familiar with the local area can cultivate local markets.
• The company can respond quickly to changes.
• There's closer contact between managers and subordinates.
• Decisions can be made quicker due to familiarity with local conditions.
• Downsides include becoming cumbersome with varied product lines and duplication of services.
• It can increase expenses and potentially lead to less qualified managers being appointed.
• Unprepared managers may negatively affect sales.

Product Organizational Structure

• Sub-businesses are assigned to product group managers.
• There's no limit to product management systems with diverse products, markets, and customers.
• Divisions may include research and development and engineering departments.
• It allows managers to operate independently, focusing on current and future product market decisions.
• Marketing managers oversee products from conception to consumer availability.
• They coordinate information with other departments and perform tasks like strategy development and forecasting.

Improving Product Management Structure

• Conducting training programs to improve product managers' skills.
• Switching to a marketing team instead of a single marketing manager.
• Eliminating managers of minor brands and consolidating them.
• Establishing divisions around major products with functional arrangements within.
• Top management support with budget, planning, and resources is crucial.

Market-Centered Organizational Structure

• Companies structure businesses to fit their markets.
• It centers on customer needs rather than region, product, or function.
• It is decentralized by market, with the market center being a profit center.
• It can restore competitive advantage by improving knowledge of customer, distributor, and retailer needs.
• It can stimulate new ideas when a new product is introduced.
• It can achieve high profits by diversifying into services.
• It is useful when marketing requires "marketing intelligence" through smart customer strategies.
• It's beneficial when shifting marketing to focus on financial benefits for customers.
• It can attract more entrepreneurial managers with wide responsibilities.
• Market-centered structures group company activities around important criteria, forming SBUs.
• Each unit is responsible for profits.

SBU Organizational Structure

• Raises whether marketing functions should be performed at the corporate staff level or divisionally.
• Some companies maintain minimum marketing services at the corporate level.
• If a division is large enough, it will have its own marketing structure.
• It emphasizes planning and analysis of company strategies.

Matrix Organizational Structure

• Efficient for establishing specialist resources and integrating functions.
• Employs a multiple "boss" arrangement.
• A specialist is a member of two units, one permanent and one temporary.
• Combines specialized departments with self-sufficient units.
• Requires teamwork across departments.

Choice of an Organizational Structure

• Factors include size of the firm, product offerings, market, competition, and management philosophy.
• Size of the firm indicates the complexity of its organization.
• The nature of products influences the choice of structure, with consumer and industrial goods requiring different services.
• Market characteristics like geographic dispersion and income class need consideration.
• Competition may necessitate organizing marketing efforts.

Evaluation of an Organizational Structure

• Criteria include facilitating control, drawing coordination, providing information, computing costs, and adopting flexibility.
• Control involves comparing performance with standards.
• Necessary for a firm to have a control mechanism.
• Coordination often takes the form of team effort.
• Good organization should have an adequate information system to manage changes.
• A firm must strike a balance among information, control, and costs.
• Flexibility is necessary to attain good performance in a changing environment.

Organizational Components

• An organization is an entity of structured and managed people to achieve goals.
• It consists of management, employees, facilities, equipment, financial resources, and policies.
• Management involves the administrative supervision of an organization including leadership.
• Leadership inspires employees to achieve the organization's goals.
• Tasks of a Leader: planning, organizing, staffing, directing, controlling.
• Roles of a Leader: strategist, facilitator, administrator, motivator, information provider, conceptualizer.
• Employees work, support, and earn profits for the organization.
• They are expected to give their best in performing their assigned tasks.
• Productivity is affected by salary, benefits, work environment, and climate.
• Management expects employee satisfaction, involvement, and commitment.
• Employee Satisfaction: Contentment in the workplace from acceptable salary, benefits, relationships, and conditions.
• Employee Involvement: Higher level of organizational relationship with increased interest and proactivity.
• Employee Commitment: Highest level, cultivating a sense of owning the enterprise's interests and welfare.

Facilities and Equipment

• Facilities and equipment may be simple or sophisticated depending on capitalization.
• It includes management of buildings, site maintenance, machinery, and technology.
• Buildings and site maintenance should be appropriate to the business.
• Management of machinery should make sure the right equipment types and quantities are in place.
• Proper management of facilities makes sure amenities such as washrooms and canteens are in good working conditions.
• Application of technology is the unifying force in facilities and equipment management.

Financial Resources

• Organizations need sufficient financial resources.
• It influences an organizations' ability to achieve set business goals and objectives.

Organizational Policies

• Include company policies, which are the lifeblood of an organization, ensuring structure and order.
• Makes possible the actualization of operations and the attainment of set goals.
• Entities include components that collaborate to achieve desired goals.
• Management sets the direction with a vision and mission statement.
• Employees, facilities, and equipment enable the organization to function whilst working together efficiently.
• Policies give direction and structure to an organization supported by needed financial resources.