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  • Why Have A Structure?

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    The document discusses different ways that businesses can structure themselves, including by function, product, area, customer, and process. It provides examples of how Hewlett Packard structured itself by product and area. The main advantages and disadvantages of different structures like functional and geographical are outlined, noting that the optimal structure depends on factors like a business's type, size, and goals.

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    Org Structures

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    The document discusses different ways that businesses can structure themselves, including by function, product, area, customer, and process. It provides examples of how Hewlett Packard structured itself by product and area. The main advantages and disadvantages of different structures like functional and geographical are outlined, noting that the optimal structure depends on factors like a business's type, size, and goals.

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    Download as ppt, pdf, or txt
    7 views11 pages

    Why Have A Structure?

    Uploaded by

    meelas123
    The document discusses different ways that businesses can structure themselves, including by function, product, area, customer, and process. It provides examples of how Hewlett Packard structured itself by product and area. The main advantages and disadvantages of different structures like functional and geographical are outlined, noting that the optimal structure depends on factors like a business's type, size, and goals.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as ppt, pdf, or txt
    of 11

    Why Have a Structure?

    • All businesses have to organise


    what they do

    • A clear structure makes it easier to see which


    part of the business does what

    • There are many ways


    to structure a business
    Some Key Terms
    • Flat or tall structure
    • Span of control
    • Chain of command
    • Hierarchy
    • Delegation
    • Empowerment
    Ways to Structure a Business
    • By function: arranging the business according to
    what each section
    or department does

    • By product or activity: organising according to


    the different products made

    • By area: geographical or regional structure


    Ways to Structure a Business
    • By customer: where different customer groups
    have different needs

    • By process: where products have to go through


    stages as they are made

    • What are the advantages/disadvantages of


    different types of business structure?
    Pros and Cons of Different
    Structures
    • This depends on the business type, size
    and structure used
    • Let’s look at a functional structure:
    Chief Executive

    Board of Directors

    Production Marketing Accounts Personnel IT


    Functional Structure

    Advantages Disadvantages
    • Specialisation – each • Closed communication
    department focuses on could lead to lack
    its own work of focus
    • Departments can
    • Accountability –
    become resistant
    someone is responsible to change
    for the section • Coordination
    • Clarity – know your and may take too long
    others’ roles • Gap between top and
    bottom
    An Example of Organisation
    by Product/Activity
    Hewlett Packard

    Imaging and Personal Enterprise HP Financial


    HP Services
    Printing Group Systems Group Systems Group Services
    Organisation by
    Product/Activity
    Advantages Disadvantages
    • Clear focus on market • Duplication of functions
    segment helps meet (e.g. different sales
    customers’ needs
    force for each division)
    • Positive competition
    • Negative effects of
    between divisions
    competition
    • Better control as each
    division can act as • Lack of central control
    separate profit centre over each separate
    division
    Organisation by Area
    Hewlett-Packard’s Headquarters
    Worldwide
    Hewlett Packard

    Americas Europe, Middle East, Africa Asia Pacific


    Houston, Texas Geneva, Switzerland Hong Kong
    Organisation by Area
    Advantages Disadvantages

    • Serve local needs better • Conflict between local


    • Positive competition and central management
    • More effective • Duplication of resources
    communication between and functions
    firm and local customers
    Other Organisational
    Structures
    • By Customer:
    Similar effects to structuring
    by product

    • By Process:
    Similar to structuring by function

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