What Are The 4 Types Of Business Structures Australia – This is “Creating an Organizational Structure”, section 9.2 from the book “Strategic Management: Evaluation and Execution” (version 1.0). For more information about this (including the license) click here.
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What Are The 4 Types Of Business Structures Australia
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In most companies, executives rely on strong and broad relationships to create a plan that they believe will fit the needs of their firm. There are four types of structures available to managers: (1) simple, (2) functional, (3) multi-industry, and (4) matrix (Figure 9.3 “General Organizational Structures”). However, like snowflakes, no two structures are alike. When creating their firm’s structure, managers take one of these characteristics and adjust it to the firm’s unique conditions. In doing this, managers should know that the choice of strategy affects the strategy of their firm in the future. Once the structure is established, future structural movements will be limited. For example, if a firm’s structure is designed to increase efficiency, the firm may lack the flexibility needed to respond quickly and take advantage of new opportunities.
Many companies start with a simple structure that does not rely on traditional systems of division of labor, often because one person does all the work required by the company. . In this type of design, the group directory is not necessary. Simple structures do not rely on traditional systems of division of labor (Figure 9.4 “Simple Structure”). If the firm is a sole proprietorship, one person will do all the work that the company needs to do. For example, in the series
Restaurant owner and comic book personality Mo Szyslak oversees all aspects of their business.
If the company has more than one person, the tasks will be shared between them before each person develops a lower level. For example, in a family restaurant or bed and breakfast, everyone has to contribute to tasks such as cleaning toilets, cooking, and serving. to strangers (hopefully not in that order). However, making the decision in a simple manner is very important. After all, often all important decisions are made by the owner of the company. Because there is less emphasis on hierarchy in a simple way, organizations that use this type of structure have fewer rules and regulations. The process of evaluating and improving employees is seamless.
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The lack of awareness of flexible structures creates advantages and disadvantages. On the positive side, the flexibility offered by simple structures encourages creativity and individualism. Informality has several characteristics. Important tasks can be overlooked if responsibility for them is not assigned. Lack of clear direction from the company’s management can create confusion for employees, lower their motivation and cause dissatisfaction in their work. Therefore, relying on a flexible approach, the business owner should communicate frequently and widely with the employees.
As a small company grows, the manager often finds that a simple structure no longer meets the company’s needs. Organizations become more complex as they grow, and this may require a division of labor and greater emphasis on hierarchy and strong relationships. In many cases, these companies are moving from using a simple method to a functional method. An organizational structure divides employees into departments, each of which is associated with activities related to a part of the company, such as sales, production, human resources, information technology , and customers. .
In the work plan, employees are divided into departments, each of which performs tasks related to the company’s work area, such as sales, production, personnel management, information technology and customer service (Fig. 9.5 “Functional structure. “). Each of these five areas will be led by a manager who will coordinate all activities related to his area of work. For example, everyone in a company reports on the company’s products to the marketing manager. The managers and responsible managers for the other four areas report to the chief executive.
Using an action plan creates both advantages and disadvantages. An important benefit of incorporating a work plan is that each person learns more about their own work. Entering a business composed of marketing professionals, a person has a great opportunity to become an expert in marketing. Therefore, the work system creates high-level technical skills. Second, bringing everyone to do a job in one office will help reduce costs and increase efficiency. Also, because everyone in a different department gets the same training, they want to interact with each other. This means that there are few conflicts in the departments.
Creating An Organizational Structure
The use of a functional design has a serious disadvantage: the implementation of design changes can be very slow compared to other structures. For example, a book publisher decided to introduce a new type of book that includes “scratch and sniff” pictures so that students can read about them, but also smell the food. different. If the publisher relies on a simple method, the head of the company can arrange someone to accompany this special new product at all stages of the publishing process.
However, if the printing house is organized using a production plan, each department of the company must be involved in the production of new books. Because the new product is outside the normal operation of each department, it can get lost in the shuffling language. And unfortunately for authors, the publishing process will be interrupted if a workplace does not meet its obligations in a timely manner. Generally, because factories are slow to adapt to change, it works best for companies that offer narrow and fixed product lines.
The specific facilities that appear on the organization chart vary among the companies that use the facilities. In the example given earlier in this section, the company is divided into five functional areas: (1) sales, (2) production, (3) human resources, (4) information technology, and (5) service. customer. On the TV show
, a different approach to operational planning is being used at the Scranton, PA affiliate of Dunder Mifflin. In 2009, the branch was divided into six functional areas: (1) sales, (2) warehouse, (3) quality control, (4) customer service, (5) human resources, and (6) accounting. The factory was eligible for membership at the time, as its product line was limited to selling office paper only.
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Many companies offer a wide range of products and services. Some of these companies sell their products in different geographical areas. These methods require businesses to be more responsive to customer needs. However, as mentioned earlier, factories change slowly. As a result, many companies are moving away from using a production plan as they expand their offerings. Often the new option is a multi-unit design. An organizational structure in which employees are divided into departments based on workplaces and/or geographic locations. . In this method, employees are divided into departments based on product areas and/or geographies.
General Electric (GE) is an example of a company organized in this way. As shown in the org chart that accompanies the opening vignette of this chapter, most of the company’s employees work in one of six business divisions (Energy, Capital, Home & Business Solutions , Healthcare, Aviation, and Transportation) or in a division that covers everything. of GE’s operations. outside the US (Global Growth & Operations).
The main advantage of establishing multiple branches is that the firm can act quickly.