Selecting and designing an organizational structure to maximize efficiency and effectiveness is a significant managerial challenge. The process involves grouping jobs together to best match the demands created by the organization's environment, strategy, technology, and human resources. Typically, in a small organization managers decide to group jobs into departments in a functional structure so as to use organizational resources effectively. As an organization grows and becomes more difficult to control, managers must choose a more complex organizational design, such as a divisional structure, a matrix, or a product team structure. It is important that managers choose the appropriate structure for the organization's strategy, as they can reap the rewards of a well-thought-out strategy only if they choose the right type of structure to implement that strategy. The ability to make the right kinds of organizing choices is often what differentiates effective from ineffective managers and creates a high-performing organization.
Read the section in the text about "Grouping Jobs into Functions and Divisions: Designing Organizational Structure" that describes the types of organizational structures and how they can be designed by managers. This exercise will test your ability to recognize various organizational structures and the pros and cons of using each type.
Roll over each company’s name to read a description. Then, drag the company’s name to its appropriate structure on the chart
Structure
Company Name
Functional
Product
Geographic
Market
Matrix
Product team