Business Administration Essay Example | Topics and Well Written Essays - 1250 words

Business Administration - Essay Example There are three main ways to create organisational structures which are discussed below: Functional structure This technique divides work according to the function of an organisation; it makes departments on the basis of organisational functions such as marketing, finance, human resource etc. (Torraco & Swanson, 1995) This is a very successful way to create an organisational structure as it promotes strong communication between departments and allows employees to use their expertise to achieve organisational goals. This structure is used by both small and large firms (Tobey & Benson, 2009). Example Revlon is a multinational cosmetics, skin care, personal care and fragrance firm and it uses functional organisational structure to manage its 6800 employees. It focuses on organisational functions to meet organisational goals. (Five approaches to Organizational Design) Divisional structure This way of developing structure, make divisions according to the types of products and market areas (Ulrich and Brockbank, 2005). This structure is usually used by large firms which have wide variety of products and its operations are geographically expanded. Small size firms can also use divisional structure on a small scale (Vosburgh, 2007). ... It uses divisional structure. (Five approaches to Organizational Design) Matrix Matrix structure is combination of functional and divisional structure; it is a hybrid which is normally used by large multinational firms. Though it is a complex and costly structure but firms using this structure enjoy the benefit of both functional and divisional structures (Aguinis, 2009). Example Starbucks coffee company is an international coffee house which operates in many countries. It uses matrix structure which is costly but Starbucks Corporation is enjoying advantages of both functional and divisional structure which is helping them to expand and to maintain its focus on company’s goals (Hitt, 2008). How managers can be supported during the process of organisational structure change. Managers play an important role during the process of organisational structure change. They need to be very systematic to implement the change and has to be very careful about the processes involved (Armstr ong, 2009). Change can be a shift to other structure or it may also mean to bring in the change within the selected organisational structure (Beatty & Schneier, 997). There is an eight-step process which can support managers the process of structural change. Following figure shows the steps involves in the process: (CliffNotes) Managers first need to analyse the need for change of organisational structure, then they need to develop the goals of change, once they decide goals then they need to select the change agent, then they need to do diagnosis, after diagnosis they need to select the intervention method, then they need to do develop a plan for change, once the plan is develop than