Question

Share your views some of the advantages or disadvantages Area of the following organizational structure in global marketing situation:

1. Product, 2. Area, 3. Customer, and 4. T-shaped organization structure. - List in bullet points

Answer 1

Organisational structure - it is is the framework within which the managerial and operating task of the organisation are performed.

as the organisation grows coordination becomes difficult due to the emergence of new functions and increase in structural hierarchies, so it is important to have a a proper structure in the organisation.

According to Peter drucker, " organisation structure is an indispensable means; and the wrong structure will seriously impaired business performance and even destroy it. "

Advantages and disadvantages of the following---

Product based organisational structure -ADVANTAGES

• Specialisation related to the particular product. It helps in developing the skills in the the divisional managers and make them ready for the future higher positions. So they gain experience and become perfect in the job.
• As the managers have to to take care of the responsibility of all the the activities of a single product that is is development of the product packaging of the product marketing etc. This increases the cross-functional collaborations very strongly. As the manager becomes efficient in all the functions related to that particular product.
• The product based department heads or divisional heads are responsible for the profits , revenues and cost related to their department. so we can say that it fixing responsibility for the losses or poor performance become easy and remedial action can be taken easily.
• The product based structure allows any department to be easily added, so whenever there is is the chance of growth or diversification, business can take advantage of that and add up a new product easily.
• It is a good structure for the organisations having many products and it maintains better coordination because all the the divisions work ok without any interruption of the other division.

DISADVANTAGES

• If the departments are made according to to the products it will lead to duplication of activities across the products. Providing each department having the separate set of similar functions increases the the expenditure of the organisation.
• Different divisions having different functions may have conflicts amongst themselves regarding the allocation of funds.
• It may lead tu to managers having gained extra power & to ignore the organisational interests. .
• It may be difficult for the foreign partners where they have more than one product being operated with.
• As the departments are not related to each other maintaining coordination is very difficult task.

Area based organisation structure-- ADVANTAGES

• In this kind of organisation structure, attention is is focused on both international and domestic operations.
• It brings occupational specialisation since emphasis is placed on a particular function.
• Global division managers are allowed to to manage their own division. There is no interruption or interference amongst the different divisions.
• There is a better control and coordination within the department as it is related to one particular task.
• This kind of organisational structure is cost effective that is is it reduces the the cost per unit.

DISADVANTAGES

• It cannot be applied universally on all the types of of businesses.
• This kind of organisational structure ignore the organisational objective and objectives pursued by the departmental manager are taken as more important.
• If the products are heterogeneous, it is difficult to work with such organisational structure.
• Coordination is a big problem for different functions of the organisation.
• It may leads to in flexibility as the people with same skills and knowledge base develop narrow perspective.

Customer based organisational structure-- ADVANTAGES

• It is good for the organisations that provide products or services which are unique to a particular market segment. For example medical services.
• They are good for the organisations where the product of the service has to be customised according to the customers.

DISADVANTAGES

• If the divisions are are having freedom, it would be difficult to develop a compatible kind of system.
• There may be activities duplication which leads to the wastage of resources of the organisation.

T-shaped organisation structure-- ADVANTAGES

• This kind of organisation structure increase competitiveness and performance of the organisation and its workers.
• It also increases individual expertise of the workers and also promotes knowledge transfer at all the levels of the organisation
• It leads to better operational efficiency.
• It brings in faster decision making as it provides autonomy and exchange of experiences..

DISADVANTAGES

• it is difficult for the companies to deal with delicate balances needed for the t-shaped organisation.
• It is is the structure that needs intense operational activities which is difficult to manage for the organisations.
• there is always the lack of time and energy with the management team so they are not able to take up the market opportunities easily e and the revenues for the future are adversely affected.
• The approaches that are taught to the management students in business schools do not work effectively e in the dynamic complex problems where it's difficult to understand what activities are going on.