Summarize a divisional structure, explaining product divisions, customer divisions, geographic divisions, and matrix structures. Give an example of each, and draw an organization chart that depicts each. (For the Matrix structure, use Ford or another car company as your example.)

Question

What will be an ideal response?

Answer 1

In a divisional structure, people with diverse occupational specialties are put together in formal groups by similar products or services, customers or clients, or geographic regions.

Product divisions group activities around similar products or services. Example: The media giant Time Warner has different divisions for magazines, movies, recordings, cable television, and so on. The Warner Bros. part of the empire alone has divisions spanning movies and television, a broadcast network, retail stores, theaters, amusement parks, and music.

Customer divisions tend to group activities around common customers or clients. Example: Ford Motor Co. has separate divisions for passenger-car dealers, for large trucking customers, and for farm products customers.

Geographic divisions group activities around defined regional locations. Example: This arrangement is frequently used by government agencies. The Federal Reserve Bank, for instance, has 12 separate districts around the United States. The Internal Revenue Service also has several districts.

In a matrix structure, an organization combines functional and divisional chains of command in a grid so that there are two command structures, vertical and horizontal. The functional structure usually doesn't change. It is the organization's normal departments or divisions, such as finance, marketing, production, and R&D. The divisional structure may vary by product, brand, customer, or geographic region.