The members and units in the organization are
grouped into functional departments such as
marketing and production.
There should be coordination across the
departments to make the organization work
Design approach shares the basic advantages and
disadvantages of functional departmentalization.
R & D
The organization is made up of a set of
Each business is operated by a general
Corporate staff allocates corporate resources
Organizations following this approach
achieve only average to weak financial
Semiconductor Telecommunications Appliances Media
It is based on multiple businesses in related
The design results from a strategy of related
Some activities are extremely decentralized
down to the divisional level; others are
centralized at the corporate level.
Opportunities of coordination and shared
resources are the advantages of this design.
The Limited Express Intimate brands Slatkin & Co
Victoria’s secret Bath and Body
White Barn Candle
It is based on two overlapping bases of
departmentalization.( e.g., Functional departments and
A set of product groups or temporary departments are
superimposed across the functional departments.
The project groups, or teams are assigned to designated
projects or programs.
A matrix design is useful when
There is strong pressure from the environment.
When large amount of information needs to be processed.
When there is a pressure for shared resources.
◦ Provides an efficient way for the organization to use
its human resources.
◦ Team members serve as bridges to their
departments for the team.
◦ Useful as a vehicle for decentralization.
◦ Enhances organizational flexibility.
◦ Involvement creates high motivation and increased
◦ Team members have the opportunity to learn new
It represents hybrid of two or more of the
common forms of organization.
An organization may have a mixture of
related divisions and a single unrelated
Most organizations use a modified form of
organization design that permits it to have
sufficient flexibility to make adjustments
for strategic purposes
The Team Organization
◦ An approach to organizational design that relies almost
exclusively on project-type teams, with little or no
underlying functional hierarchy.
The Virtual Organization
◦ An organizational design that has little or no format
structure with few permanent employees, leased
facilities, and outsourced basic support services.
◦ It may conduct its business entirely on-line and exists
only to meet for a specific and present need.
The Learning Organization
◦ An organization that works to facilitate the lifelong
learning and development of its employees while
transforming itself to respond to changing demands and
The trend toward internationalization of
How to design a firm to deal most effectively
with international forces and to compete in
◦ Create an international division?
◦ Establish an international operating group?
◦ Make international operations an autonomous