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MSE Assignment - Variety in Organization Structure

The document discusses organizational structures, defining them as systems that outline how activities are directed to achieve organizational goals. It highlights four main types: functional, multi-divisional, flat, and matrix structures, with examples from companies like Amazon, Proctor and Gamble, ITC Ltd., and Hindustan Unilever Ltd. Each company's structure is analyzed for its benefits and limitations, emphasizing the importance of adaptability and efficiency in different sectors.

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12 views11 pages

MSE Assignment - Variety in Organization Structure

The document discusses organizational structures, defining them as systems that outline how activities are directed to achieve organizational goals. It highlights four main types: functional, multi-divisional, flat, and matrix structures, with examples from companies like Amazon, Proctor and Gamble, ITC Ltd., and Hindustan Unilever Ltd. Each company's structure is analyzed for its benefits and limitations, emphasizing the importance of adaptability and efficiency in different sectors.

Uploaded by

imsbose
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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ORGANISATIONAL STRUCTURE AND ITS

RELEVANCE IN DIFFERENT SECTORS

Presented By –
Arpita Bera
Pratyusha Kuila
Srijan Bose

PGDM, 2022-24
CALCUTTA BUSINESS SCHOOL
Organization Structure and types of Organization Structure

What is an organizational structure?


- An organizational structure is a system that outlines how certain activities are directed in order to
achieve the goals of an organization

The four broad types of organizational structures are –


• Functional structure
• Multi-divisional structure
• Flat Structure
• Matrix structures

We will de discussing in this presentation about the kind of organizational structures followed by
companies like Amazon, Proctor and Gamble, ITC Ltd. and Hindustan Unilever Ltd. along with their
benefits and limitations of the structure they follow.
AMAZON
Amazon organizational structure has the following four key features:

1. Functional Hierarchical corporate structure. Hierarchical


structure at Amazon has developed due to the immense size of
the business.

2. Hybrid project groups. Amazon corporate structure integrates


hybrid project groups when developing new products and services.
Specialists from various departments are attracted according to their
skills and competencies required for the project.

3. Flexibility of the business. It is important to note that despite its


large size, unlike many other companies with hierarchical
organizational structure, Amazon remains highly flexible to adapt to
frequent changes in the external marketplace. Amazon founder and
former CEO Jeff Bezos is credited with the introduction of ‘two
pizza rule”. According to this rule, meetings should be held in teams
small enough that could be all fed with only two pizzas. “Two pizza
rule” continues to this day under the new CEO Andy Jassy.

4. Stability in the top management. Stability is one of the key


features of Amazon. Specifically, the largest internet company by
revenue experiences “very little turnover among its most important
power players, with many of them having been at the company for
years, if not decades.”
Functional Structure –
Benefits -

• Cross-functional learning
• People with common skills can supervise each other
• People become committed towards work and thus develop into a core competence for the
organisation

Limitations -

• Communication gap among various functional team


• Geographical spread cause a problem in a functional structure. A centralized structure is better
in this case
• Top managers focus more on the functional development of their own unit rather than the
development of the company as a whole
DIVISIONAL STRUCTURE
P&G is organized into Gobal business units (GBUs), which are self-contained divisions responsible for a
particular product category or group of products.

The GBUs have their own functional departments for marketing, research and development, manufacturing,
finance, and human resources.

P&G's GBUs include:

• Beauty: includes products such as cosmetics, hair care, and personal care products.

• Grooming: includes products such as razors, blades, and shaving preparations.

• Health Care: includes products such as toothpaste, mouthwash, and other oral care products.

• Fabric & Home Care: includes products such as detergents, fabric softeners, and household cleaners.

• Baby, Feminine & Family Care: includes products such as diapers, baby wipes, and feminine hygiene
products.
Divisional Structure –

Benefits –

•Each GBU is responsible for developing its own business strategy, identifying growth
opportunities, and managing its own profit and loss

•The divisional structure allows P&G to be responsive to local market needs

•Promotes innovation and entrepreneurship, as each division has its own goals and
performance metrics.

Limitations –

•Can lead to a lack of collaboration and coordination across different divisions, which may
result in missed opportunities or conflicts.

•May result in a loss of overall corporate identity and cohesion.

•Can be more expensive to implement and manage, as each division requires its own
resources and management structure.
Imperial Tobacco Company of India Limited.

• ITC Limited, an Indian conglomerate company, follows a diversified organizational structure. In this
type of structure, the company operates in various business segments, each of which is managed
independently, with its own set of functional departments.

• ITC Ltd has both Divisional and Functional Organization Structure

• A Divisional organisation structure gives a larger business enterprise the ability to segregate large sections
of the company’s business into semi-autonomous groups. In this organisation, it is divided on basis of
products like FMCG, hotels, paper boards, packaging sector, IT sector and agri-business.

• A Functional structure is one of the most common organisational structures. Under this structure, the
organisation groups employees according to a specialised or similar set of roles and tasks. In this
organisation, it is divided on the basis of functions like marketing, finance, sales, production, IT
Department etc.
MATRIX STRUCTURE
• Hindustan Unilever Limited (HUL) is a multinational
consumer goods company based in India. The company
has a matrix structure that consists of different business
units and functions that support them.

• The company is organized into business clusters, each


with its own profit and loss responsibility. Within each
cluster, there are functional departments such as
marketing, finance, and human resources. These
functional departments are responsible for providing
support to the business cluster.

• HUL also has cross-functional teams that are created to


work on specific projects. These teams are made up of
employees from different functional departments and
are led by a project manager. The project manager is
responsible for the success of the project and reports to
both the functional manager and the business cluster
head.
Matrix Structure –
Benefits -

• This matrix structure allows HUL to be flexible and responsive to


changes in the market.

• It also allows the company to leverage the expertise of employees from


different functional departments, ensuring that projects are completed
successfully.

• Provide opportunities for employee development and career growth.

Limitations -

• However, this structure can also be complex and may lead to conflicts
between functional managers and project managers.

• Can lead to confusion and uncertainty regarding authority and decision-


making

• High potential for duplication of efforts and communication

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