![]() Instrument dealers may create beautiful music, but they rarely create complex organizational structures. There is flexibility in the management of many yoga studios given the laid back management style often embraced. When a dry cleaner is family owned as many are, all members of the family pitch in as needed to clean clothing and wait on customers. The reality show Miami Ink illustrates how a tattoo parlor’s simple structure governs a colorful set of tattoo artists who create body art for their patrons.Īrchitects often also act as marketers and accountants when drafting their small business plans.īait shop owners generally do not dive deep into their pockets to pay for additional personnel as many are owner operated. The pawn shop’s simple structure will mean that the same person values your coins, decides how much money you can borrow, and writes up your paperwork. Table 9.4 Simple Structure Need a few dollars to tide you over? You may want to pawn your rare coin collection. We illustrate a number of businesses that commonly rely upon a simple structure below. ![]() Most small businesses begin with a simple structure where one person or a small set of people share the tasks needed to accomplish the firm’s goals with relatively little formalized division of labor. As parodied in the move Office Space, this structure is common in high tech and engineering firms. General Electric, for example, has six product divisions: Energy, Capital, Home & Business Solutions, Healthcare, Aviation, and Transportation.įirms that engage in projects of limited duration often use a matrix structure where employees can be put on different teams to maximize creativity and idea flow. In this type of structure, employees are divided into departments based on product areas and/or geographic regions. ![]() ![]() Within a functional structure, employees are divided into departments that each handles activities related to a functional area of the business, such as marketing, production, human resources, information technology, and customer service. Consequently, this structure is common for many small businesses. If the firm is a sole proprietorship, one person performs all of the tasks that the organization needs to accomplish. Simple structures do not rely on formal systems of division of labor, and organizational charts are not generally needed. Table 9.3 Common Organizational Structures Simple Structure While no two organizational structures are exactly alike, four general types of structures are available to executives: simple functional, multidivisional, and matrix. If a firm’s structure is designed to maximize efficiency, for example, the firm may lack the flexibility needed to react quickly to exploit new opportunities.Įxecutives rely on vertical and horizontal linkages to create a structure that they hope will match the firm’s needs. Once a structure is created, it constrains future strategic moves. As they do this, executives must realize that the choice of structure will influences their firm’s strategy in the future. When creating a structure for their firm, executives will take one of these types and adapt it to fit the firm’s unique circumstances. Like snowflakes, however, no two organizational structures are exactly alike. Four types of structures are available to executives: (1) simple, (2) functional, (3) multidivisional, and (4) matrix (Table 9.3). Within most firms, executives rely on vertical and horizontal linkages to create a structure that they hope will match the needs of their firm’s strategy. Understand why a change in structure may be needed.Know and be able to differentiate among the four types of organizational structure.
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