Essay on Organizational Design and Organizational Structure

1437 Words Oct 9th, 2010 6 Pages
An organization is a pattern of relationships-many interwoven, simultaneous relationships- through which people, under the direction of managers, pursue their common goals. These goals are the products of the decision - making processes. The goals that managers develop through planning are typically ambitious, far-reaching, and open-ended. Managers want to ensure that their organizations can endure for a long time. Members of an organization need a stable, understandable framework within which they can work together toward organizational goals. The managerial process of organizing involves making decisions about creating this kind of framework so that organizations can last from
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Geographic organization is logical when a plant must be located as close as possible to sources of raw materials, to major markets, or to specialized personnel. (3) In division by customer, the organization is divided according to the different ways customers use products.

Organization by division (Product/Market) has several advantages.
(1) Because all the activities, skills, and expertise requisites to produce and market particular products are grouped in one place under a single head, a whole job can more easily be coordinated.
(2) High work performance maintained.
(3) In addition, both the quality and the speed of decision making are enhanced because decisions made at the divisional level are closer to the scene of the scene of action. At the same time.
(4) The burden on central management is eased because divisional managers have greater latitude to act.
(5) Perhaps most important, accountability is clear.
(6) The performance of divisional management can be measured in terms of the division’s profit or loss.

The divisional structure does have some disadvantages, however.
(1) The interests of the division may be placed ahead of the goals for the total organization. For example, because they are vulnerable to profit and loss performance reviews, division

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