Designing effective organizational structures - DESIGNINGORGANIZATIONALSTURCTURE: SPECIALIZATION AND COORDINATION
4 important questions on Designing effective organizational structures - DESIGNINGORGANIZATIONALSTURCTURE: SPECIALIZATION AND COORDINATION
When an organization increases the number and kinds of goods and services it produces, this also leads to an increase in the number and types of customers it has to serve, and to do this a company usually has to open up factories and offices at an increasing number of geographic locations. When organizations grow in these ways, what is needed is a structure that:
- Simultaneously increase managers’ control of its different individuals subunits so that subunits can better meet product and customer needs
- Allow managers to control and integrate the operation of the whole company to ensure all its subunits are meeting organizational goals.
Managers regain control of their organizations when they decide to adopt a more complex structure, which is the result of three choices:
2. An increase in horizontal differentiation
3. An increase in integration
A matrix is a rectangular grid that shows a vertical flow of functional responsibility and a horizontal flow of product responsibility.
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