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Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin
Designing
Organizational
Structure
7-2
Learning Objectives
• How an organizational structure is determined?
• What are the roles of an organisational structure?
7-3
Designing Organizational Structure
•Organizational structure: Formal system of task
and reporting relationships that coordinates and
motivates organizational members so that they
work together to achieve organizational goals
•Organizational design: Process by which managers
make specific organizing choices that result in a
particular kind of organizational structure
7-4
Factors Affecting Organizational
Structure
7-5
Divisional Structures
•Organizational structure composed of separate
business units within which are the functions that
work together to produce a specific product for a
specific customer
•Product structure: Each product line or business is
handled by a self-contained division
7-6
Product Structures
7-7
Divisional Structures
•Geographic structure: Each region of a country or
area of the world is served by a self-contained
division
7-8
Market Structure
•Market structure: Each kind of customer is served
by a self-contained division; also called customer
structure
•Matrix structure: An organizational structure that
simultaneously groups people and resources by
function and product
7-9
Matrix Structures
7-10
Product Team Structures
7-11
Product Team Design Structure
•Product team structure: Members are permanently
assigned to a cross-functional team and report only
to the product team manager or to one of his direct
subordinates
•Cross-functional team: Group of managers brought
together from different departments to perform
organizational tasks
7-12
Network Structures
•Network structure: Series of strategic alliances
that an organization creates with suppliers,
manufacturers, and distributors to produce and
market a product
• It allows firms to bring
resources together in
a boundary-less
organization

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