Divisional management structure

Most bureaucratic organizational structures can be divided into functional and divisional management structures.

Functional refers to the oldest and quite often used in practice. They can be said to be traditional, and therefore they are called classical. This is the result of the fact that management is divided into separate elements, each of which has its own task in management, that is, it performs a certain function. Functional structure works effectively in small and medium-sized firms.

At large enterprises, divisional management structure has been applied for several decades already.

The word "divisional" came from the Latin language, which means "division into parts, departments." The process of systematization occurs on three grounds:

1. By product (product or service).

2. By groups of customers.

3. By geographic region.

Divisions of firms operate independently, they are practically independent organizations, which are subordinated only to the central management body of the company.

The product divisional structure

The need for its creation is caused by the growth in the number of large firms and corporations. They penetrate into new production spheres, very different from the previous ones. There is the emergence of new management departments that deal with a certain product.

Divisional management structure, focused on the buyer, consists of separate units. Each of them, in turn, is aimed at the desired category of consumers. Almost all large corporations have such departments.

Regional divisional management structure.

Its creation, as well as the product, is caused by the rapid growth of corporations. They quickly spread their influence over huge territories not only inside the country, but also abroad.

Depending on what factor is particularly important for the firm, to ensure its strategic plans, and select a divisional management structure of a specific type: either by product, or by buyer, or by geography.

The advantages inherent in these management structures :

- First of all they contribute to the rapid growth of the company.

- Secondly, increase the independence of managers.

- Thirdly, they increase the responsibility of management for production.

- Fourth, they contribute to the expansion of knowledge.

- Fifthly, create favorable conditions for the training of senior managers.

Along with the merits, divisional structures also have disadvantages:

- First, if there are weak information links between departments, there may be duplication of activities.

- Secondly, weak links with the main management unit, as a result of which the top management of the firm often can not keep under control the activities of its divisions (divisions), and as a result, large losses.

The reasons for the shortcomings are the following: weak and inefficient management of the company, insufficient budget, an inconsistent focus on the desired results. Eliminate the negative aspects in the following way: strengthening the leadership, introducing a clear system of motivation, budgeting, ACS, having established horizontal ties, clearly delineating the powers.

Man with a similar type should be managed by a person with a democratic leadership style, as he will have to delegate many powers to the heads of divisions, on which the effectiveness of the company's management depends. The divisional structure can effectively work not only in large, but also in medium-sized companies. So shows the modern practice.