Free Different Types of Organizational Structures and their Relationship to Strategic Management Essay Sample
Types of Organizational Structures
Basically, there are three types of organizational structures that companies deploy in order to effectively execute their respective operations. A company will be expected to choose either of the structures to avoid confusion. These structures are as follows:
Divisional structures: These structures are established according to the various divisions present within the given organization. They are further classified into: Product structures which assign employees and their work into the varieties of products manufactured. For instance a company that produces four varieties of products will definitely have four different divisions for these products. We also have a divisional structures based upon the market, this is to say that the company would position the employees according to different types of market they serve. The last divisional structure is based upon the geographical locations of the company so that the company distributes its offices as par the different zones.
Matrix Structures: in this type of structure there is an evident combination of function and product structures meaning that it combines the best components for effective operations. This structure is considered the sophisticated of the other two structures.
Traditional structure: this structure is based on functional allotment and departments and they tend to follow organizational rules and procedures to the latter. There are three sub-sections under this structure and they include: Line structure which has a definite line of command in that its consent flows from top to bottom. There is also line and staff structure under this organizational structure that allows for both staff and line to work together.
Functional structure: it refers to a structure that allows for employees of a given company to be classified into performing specialized tasks within an organization. For instance, the accounting department would be staffed with accountants so that they are made responsible for computing fair and effective financial statements of the company. The deployed specialization encourages procedural efficiencies where the employees become specialists within their own realm of expertise.
Multidivisional structure: refers to a structure that is composed of different operating allotments whereby each allotment is made to represent a specific profit hub and the top mangers are mandated to entrust responsibilities of daily operations to lower divisional managers.
Personally, I think that Wal-Mart is operating under the matrix organizational structure in the sense that it combines both product and functional structures to aid in its daily operation. It’s also possible that it deploys geographical structures in running its operation in that there are different zones of Wal-Mart, for instance there is North America and Europe zones that the store operates.
Relationship between organization Structure and Strategy
The organization structure shapes its strategy directly in the sense that the company’s strategic options are always limited by the underlying structural environment. In our case, before Wal-mart managers embarked on developing the companies’ corporate strategies, they begun by analyzing the different business environments for which they were to operate. They went ahead to assess the strengths and weakness of their competitors and with this complete analysis they established value chains accordingly so as to set customized financial targets and budget allocations. It’s therefore wise to state that the structuralism approach became the deterministic factor for developing the organization.