Geographic Organizational Structure

by Lucy Friend, Demand Media

Geographic organizational structure is used by organizations with many business
locations.
Geographic organizational structure is used by organizations with many business
locations.
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Organizational structure defines the hierarchy in which an organization will ope
rate. There are many defined types of organizational structure, but some organiz
ations may create their own, or use a combination of several structures to effic
iently run business operations. Geographic organizational structure is used for
organizations that have offices or business units in different geographic locati
ons.
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Function
A geographic organizational structure defines a reporting and functional system
across multiple locations. This type of structure allows an organization's offic
es to operate individually while adhering to company policies and values. Office
locations can be local, national or international.
Direction
Each geographic location is overseen and directed by one or several executives.
These executives oversee and direct the functions of the location and have respo
nsibility for the entire operation and its finances.
Related Reading: Organizational Structure and Culture Change
Reporting Structure
Depending on the size of the organization, each geographic location may report t
o an executive who oversees several locations or it may report directly to top e
xecutives who are located at the main office of the organization. The reporting
structure is based on the size of the organization and its industry.
Industries
Geographic organizational structure is used mainly in industries like retail and
hotel chains, transportation and other large national and international organiz
ations. Manufacturing organizations with several plants in different geographica
l locations may choose to operate using a geographic structure.
Geography
Geographic organizational structure allows for each business unit or office to o
perate as its own entity based on where it's located. Many organizations may exp
erience more or less business opportunity in different places. This can increase
or decrease financial budgets, revenues, the number of employees at the locatio
n and their salaries. An area's cost of living may also play a factor in the ove
rall operations at each location.
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References (3)
About the Author
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