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Strategic Management and Organizational Structure

Examples of management structures include

  1. functional division
  2. Product division
  3. Matrix methods
  4. Geographical division
  5. International division

The importance of organizational structure is that it facilitates teamwork and enhances communication across all levels of organizations ((Dess et al 2004, p.354).

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Strength and weaknesses of organization’s structure

Functional structure

The advantages of the functional structure are that it pools specialists in each particular field thereby enhancing coordination and control. This structure enables the centralization of decision-making in an organization facilitating organizational perspectives across departments. It enables efficient use of managerial talents and technical manpower and last, it facilitates the development of career opportunities and professional development in areas of specialization.


Since departments specialize in different areas, communication and coordination are disrupted. Specialized employees are likely to develop narrow functional orientation limiting the organization’s growth. Also, the specialized department makes their own decisions which merge into one centralized office thereby overburdening top managers. Uniform performance standards are become hard to establish (Dess et al 2004, p.348).

Divisional structure


Division structure increases strategic and operational control enabling easier communication in the top corporate-level executives. It is easy to focus on environmental changes under this structure. Unlike functional division, this structure minimizes problems sharing resources. General managers easily develop under this structure and they increase focus on products and markets.


Division structure enabled duplication of departments among personnel, operations, and investment thereby increasing operational costs. Competition among various divisions may disrupt an organization’s overall performance. An organization may overemphasize short-term performances that may not be realistic. It also becomes difficult to maintain a uniform corporate image (Dess et al 2004, p.348).

Matrix methods


Matrix structure allows efficient utilization of resources thereby saving on operational costs. Managers and employees develop professionally since they are exposed to a broad range of responsibilities. The structure improves coordination, communication, and flexibility of the organization. Collaboration among professional colleagues increases market responsiveness.


Human resources are duplicated and working relationships become complicated since manpower is divided across different divisions. Over-reliance on teamwork may slow down timely decision-making. Employees may start leadership competition thereby increasing levels of conflict. Dual-reporting actions may make the company unable to provide certainty regarding its accountability (Dess et al 2004, p.348).

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Challenges of Organisation structures

In a functional organization, departments are divided into major key functions thereby disrupting the communication and coordination functions of the organization. This challenge can be overcome through the centralization of decision-making through one central reporting unity.

Matrix organization is a structure that allows a company to address multiple business dimensions using a variety of command structures. Running such an organization becomes complex but the organization can overcome this challenge by developing teamwork which improves coordination, communication, and flexibility of the organization.

In divisional methods, a company is broken down into semiautonomous units based on activities. Duplication of departments among personnel increases operational costs. This challenge is overcome by sharing profits such that units that are not doing well can be supported until they stabilize (Dess et al 2004).

List of References

Dess, G. Gregory., Lumpkin, G. T., Marilyn. L. Taylor. 2004, Strategic Management; creating Competitive Advantages, McGraw Hill Professional.

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