A functional structure groups employees by their skills and expertise. While it provides specialization benefits, it can cause communication, measurement, location, customer, and strategic problems as the organization grows. Managers can address these control problems by redesigning the structure to improve integration between functions. As organizations diversify their products, locations, and customers, they often adopt divisional structures like product, geographic, and market divisions to better align the organization with these demands. Matrix and network structures provide alternative approaches to balancing functional and divisional coordination needs.

1. Designing Organizational Structure

4. Functional Structure

5. Functional Structure (cont.)

10. Improving Integration in a Functional Structure by Combining Sales and Marketing

11. Differentiation and Integration

12. Differentiation and Integration (cont.)

18. Product Division Structure

19. Assignment of Product-Oriented Functional Teams to Individual Divisions

21. Multidivisional Structure

24. Multidivisional Structure in Which Each Division Has a Different Structure

28. Product Team Structure

30. Geographic Structure

32. Market Structure

34. Matrix Structure