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Org Structures

The document discusses different ways to structure a business including by function, product, area, and customer. It provides examples of functional and product structures and their pros and cons. The document also discusses organizing a business by area and other structures such as by customer and process.

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174 views13 pages

Org Structures

The document discusses different ways to structure a business including by function, product, area, and customer. It provides examples of functional and product structures and their pros and cons. The document also discusses organizing a business by area and other structures such as by customer and process.

Uploaded by

api-3832696
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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http://www.bized.ac.

uk

Organisational Structures

BTEC Business

Copyright 2005 – Biz/ed


http://www.bized.ac.uk

Why Have a Structure?


• All businesses have to organise what
they do

• A clear structure makes it easier to see


which part of the business does what

• There are many ways to structure a


business

Copyright 2005 – Biz/ed


http://www.bized.ac.uk

Some Key Terms


• Flat or tall structure
• Span of control
• Chain of command
• Hierarchy
• Delegation
• Empowerment

Copyright 2005 – Biz/ed


http://www.bized.ac.uk

Ways to Structure a Business


• By function: arranging the business
according to what each section or
department does

• By product or activity: organising


according to the different products
made

• By area: geographical or regional


structure
Copyright 2005 – Biz/ed
http://www.bized.ac.uk

Ways to Structure a Business


• By customer: where different customer
groups have different needs

• By process: where products have to go


through stages as they are made

• What are the advantages/disadvantages


of different types of business structure?

Copyright 2005 – Biz/ed


http://www.bized.ac.uk

Pros and Cons of Different


Structures
• This depends on the business type,
size and structure used
• Let’s look at a functional structure:
Chief Executive

Board of Directors

Production Marketing Accounts Personnel IT

Copyright 2005 – Biz/ed


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Functional Structure
Advantages Disadvantages
• Specialisation – each • Closed
department focuses communication
on its own work could lead to lack of
focus
• Accountability –
• Departments can
someone is become resistant to
responsible for the change
section • Coordination may
• Clarity – know your take too long
and others’ roles • Gap between top
and bottom

Copyright 2005 – Biz/ed


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An Example of Organisation
by Product/Activity
Hewlett Packard

Imaging and Personal Enterprise HP Financial


HP Services
Printing Group Systems Group Systems Group Services

Copyright 2005 – Biz/ed


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Organisation by
Product/Activity
Advantages Disadvantages
• Clear focus on • Duplication of
market segment functions (e.g.
helps meet different sales force
customers’ needs
for each division)
• Positive competition
between divisions • Negative effects of
• Better control as competition
each division can act • Lack of central
as separate profit control over each
centre separate division

Copyright 2005 – Biz/ed


http://www.bized.ac.uk

Organisation by Area
Hewlett-Packard’s
Headquarters Worldwide
Hewlett Packard

Americas Europe, Middle East, Africa Asia Pacific


Houston, Texas Geneva, Switzerland Hong Kong

Copyright 2005 – Biz/ed


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Organisation by Area
Advantages Disadvantages

• Serve local needs • Conflict between


better local and central
• Positive competition management
• More effective • Duplication of
communication resources and
between firm and functions
local customers

Copyright 2005 – Biz/ed


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Other Organisational
Structures
• By Customer:
Similar effects to structuring by
product

• By Process:
Similar to structuring by function

Copyright 2005 – Biz/ed


http://www.bized.ac.uk

Organisational Structures
• Now go to the Activity for more……

Copyright 2005 – Biz/ed

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