Assumption

I am a Management Trainee in e-shop, an e-commerce Company The companys major product line is books e-shop has future plans to increase its product line e-shop Organizational structure - Functional The company conducts Weekly Knowledge Sharing Session for middle level managers Last week there was a session on Functional Structure

DIVISIONAL STRUCTURE- An example

Functional Structure is best suited for which type of organization?

A) Organization with one or few closely related products B) Organization with one or more products that are different from one another

Functional Structure

Case: Amrutha Ltd Amrutha Ltd is an established beverage company. Its product Chillz, cool drink is one of the highest selling drinks in South India. Recently, the company entered into packaged food items market with its product Lite chips. After 3 months, Lite chips has not been performing well in the market and Chillz sales also have come down.

Functional Structure

Challenges

CEO

Lack of ownership of product Slow response to environment changes Delay in decision making Restricted view of Organizational Goals

Acct

Sales & Mktg

Purchase

Prod

HR

Divisional Structure

Divisional Structure - What?

An organization is grouped on the basis of outputs

- Products , services, projects, programs, businesses or profit centres

Known as Product structure or strategic business units Geographic grouping is a special case of divisional structure
- e.g. Banks with regional offices

Customer or market based grouping - e.g. IT companies

Divisional Structure - Why?

Suitable for fast changes in unstable environment High coordination across functions

Allows units to adapt differences in products, customers, regions

Decentralizes decision making

THANK YOU