Design and structure of the organization is a factor to be chosen to best to implement a strategy. The structure of an organization is the framework within which all the activities of management, i.e. planning, operating, controlling and motivating, take place. The actual organizational set-up is laid out in an organization chart which shows:
⦁ who reports to whom, and
⦁ who is responsible for what.
Organization structure is a framework for the organization on which it functions its activity. Organization design is the overall set of structural elements and the relationship among those elements used to manage the total organization.
Following Types of Organization structure may be help full for strategy implementation;
This structure allocates key functional areas to managers; while a director co-ordinates their activities (see Figure following figure).
Advertising Manager Sales Promotion Manager Sales Manager Market Research Manager
The functional structure is typically found in smaller companies or those with a small range of products. It is based on the primary tasks which the company has to carry out.
The subdivisions within a divisional structure can be formed on the basis of such units as
⦁ types of product
⦁ different services
⦁ geographical areas.
The structure is used where there is more diversity within the organization than can be adequately covered within a functional structure, although the divisions themselves are likely to be split into functional management areas.
Functional structures allow greater operational control at senior levels in an organization but, when the organization is large, or its product/service base is diverse, this can overburden senior managers with operational issues rather than allowing them the necessary time to take a strategic view.
With a divisional structure this problem can be overcome, with each division able to concentrate on its own business environment, as in following Figure;
Division A Division B Division C Division D
Functions Functions Functions Functions
Matrix structure creates dual lines of authority and combines functional and product departmentalization.
Following are the key elements which take place in matrix structure;
⦁ Gains the advantages of functional and product departmentalization while avoiding their weaknesses.
⦁ Facilitates coordination of complex and interdependent activities.
⦁ Breaks down unity-of-command concept.
The matrix structure is intended to avoid the weaknesses of the functional and divisional structures. The essence of a matrix is that the functional relationships within the business still stand. See the figure;