Discussion – Organizational Structural Designs

Discussion – Organizational Structural Designs

An organizational structure plays an important role in determining the success of a business. How the organization structures itself determines its effectiveness in achieving its strategic goals. The structure determines the departments that should exist, the leadership structure, the decision-making, and the reporting model. Therefore, it affects the operational efficiency of an organization. This is any businesses need to be careful when they design their structures. There are various organizational structures that a business may choose from. This essay discusses various structures and how they are applied in real-life organizations. Need help with your assignment ? Reach out to us. We offer excellent services.

Functional Organization

            Functional business structures are the most common in many businesses. A functional structure represents an organization that is divided into various functional areas (Galbraith, 2002). For example, a single organization may have a finance department, marketing, human resources, and information communication technology. The departments are usually vertical and independent from each other. Work and communication occur within each of the functional areas but are communicated across the organization with the help of the department heads (Galbraith, 2002). The advantage of this system is that it enhances efficiency by grouping people with similar skills together. However, it can cause a disconnection within the functional departments. In spite of this limitation, it is applied in many organizations.

An example of a real-life company with a functional structure is Walmart. Walmart is the largest retail company, with thousands of branches within and outside the United States. With such a large organization, it is only reasonable for it to be divided into several departments to enhance its efficiency. For example, Walmart has a department that manages its human resources, a department for managing employees, one for technology and several others. This signifies the functional division of the organization.

Matrix Organization

            A matrix structure is one where an organization is grouped by two perspectives. A company may be grouped in terms of the functional departments as well as the product (Galbraith, 2002). It can also be categorized in terms of a function and region. For example, in a business that has been grouped in terms of region, each region will have its own management and functional departments. An example of a business that currently operates with such a structure is Unilever. Unilever, Inc. is a business with branches in almost all parts of the world. Therefore, the company is divided into regions. For instance, Unilever is in the U.S., the UK, Africa, and Asia. In each of these branches of the company, there is a functional structure in that they are divided into functional units to enhance operational efficiency.

Networked Organization

            A networked organization has a flexible and decentralized structure where the management and coordination of relations occur both within and outside the organization (Teece, 2010). This type of organization emulates a social network where both informal and formal inter and intra-organizational relationships are formed to enhance performance. An example of a business with a networked structure is H&M. This is a popular clothing brand whose structure is supported by networks it has created with other organizations. For example, H&M manufactures a lot of its clothing in Asia.

Virtual Organization

            A virtual organization is one that is made of detached entities, including the employees and their roles. The members of a virtual organization do not have to meet at a physical location for productivity and communication to be done (Gambardella & McGahan, 2010). Instead, they are connected by information technology. An example of a real-life company that has implemented a virtual structure is Nike, Inc. Nike’s response to the large disintegration of production functions was the development of a virtual organization. The organization manages most of its functions in a virtual system where it connects with other firms in a cybernetic system.

Creating an Organization with High Performance

            When designing an organization, determining the structure it will depict is an important part. However, before choosing the structure, it is vital that the business understands its strategy (Teece, 2010). Say, in this case, the strategy of the business at hand is to expand to various regions. A matrix structure would be used to enhance performance. If tasked with designing such an organization, I would divide it into a functional and regional structure. The business will be divided into various regions. In each of the regional units, there will be a functional business structure. Such a structure will enhance performance since each region has its unique characteristics. Thus, each of the regions’ functional units will use unique strategies that can enhance performance. This helps each region covered by the organization to thrive.

Conclusion

Choosing the right organizational structure is important for a business’s performance. This paper demonstrates that there are various structures that businesses can choose from. However, they need to evaluate the type of business they engage in and their strategy. The analysis of strategy helps to create a plan that works best to achieve the strategic goals.

References

Galbraith, J. R. (2002). Designing organizations: Strategy, Structure and Process and the Business Unit and Enterprise Levels.

Gambardella, A., & McGahan, A. M. (2010). Business-model innovation: General purpose technologies and their implications for industry structure. Long range planning, 43(2-3), 262-271.

Teece, D. J. (2010). Business models, business strategy and innovation. Long range planning, 43(2-3), 172-194.

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Overview
Modern organizations can take on many different types of design. The days of the traditional functional organization are rapidly giving way to project-based matrix, networked, and even virtual designs. This assignment asks you to explore four types of organizational structure. You will delve deeper into one of them by explaining how it can be used in an organization to attain high performance. Completing this paper will help you see how structure is determined by strategy in the quest for high performance.

Instructions
To prepare for this assessment, use the Capella library to research each of the following designs:
1. Functional organization.
2. Matrix organization.
3. Networked organization.
4. Virtual organization.
You will find that the Capella library contains a vast number of articles on each of these organization designs. Use the Organizational Structure, Learning, and Performance Library Guide (given in the resources) to do the library research.
In a 3-page paper:
• Define each of the four designs listed above and then identify a real-world organization example for each.
• Choose one of the organizational designs from the four and describe how you would use that design to create an organizational structure that would lead to high performance.

Submission Requirements
Your paper should meet the following requirements:
• Written communication: Written communication should be free of errors that detract from the overall message.
• APA format: Resources and citations should be in the current APA format. Be sure to include the title and reference pages.
• Length: 3 typed pages, double-spaced pages, not including the title and reference pages.
• Font and font size: Times New Roman, 12 points.

Resources
• Structural Design Paper Scoring Guide.
Structural Design Paper Scoring Guide
Due Date: End of Unit 2.
Percentage of Course Grade: 4%.
CRITERIA NON-PERFORMANCE BASIC PROFICIENT DISTINGUISHED
Explain what is meant by functional organization.
15% Does not describe what is meant by functional organization. Describes what is meant by functional organization. Explains what is meant by functional organization. Explains what functional organization means with references to scholarly works.
Explain what is meant by matrix organization.
15% Does not describe what is meant by matrix organization. Describes what is meant by matrix organization. Explains what is meant by matrix organization. Explains what matrix organization means, with references to scholarly works.
Explain what is meant by networked organization.
15% Does not describe what is meant by network organization. Describes what is meant by network organization. Explains what is meant by network organization. Explains what is meant by network organization, with references to scholarly works.
Explain what virtual organization means.
15% does not describe what virtual organization means. Describes what is meant by virtual organization. Explains what is meant by virtual organization. Explains what virtual organization means with references to scholarly works.
Identify real-world examples of organizational design ideas that have been put into practice.
20% Does not list real-world examples of organization design. Lists real-world examples of organization design but does not tie them to underlying ideas. Identifies real-world examples of organization design ideas put into practice. Identifies real-world examples of organization design ideas put into practice, including references to scholarly work.
Describe a model for organizational structure that leads to high performance.
20% Does not describe a model for organizational structure. Describes a model for organizational structure without tying it to high performance. Describes a model for organizational structure that leads to high performance. Describes a model for organizational structure that leads to high performance, including references to scholarly works.