PRODUCT OR MARKET ORGANIZATION

Product or Market Organization - organization of a company by divisions - appropriate for a large corporation with many product lines in several related industries

ADVANTAGES:
1. Flexible and responsive to change 2. Provides a high concern for customer needs 3. Provides excellent coordination across functional departments 4. There is easy pinpointing of responsibility for product problems 5. There is emphasis on overall product and division goals 6. The opportunity for the development of general management skills is provided.

DISADVANTAGES:
1. There is a high possibility of duplication of resources across divisions 2. There is less technical depth and specialization in divisions 3. There is poor coordination across divisions 4. There is less top management control 5. There is competition for corporate resources

President
Vice President Government Accounts Vice President Industrial Accounts Vice President Residential Accounts

Marketing Construction

Marketing Construction

Marketing Construction

Finance
Human Resources

Finance
Human Resources

Finance
Human Resources

MATRIX ORGANIZATION

Matrix Organization - is a structure with two (or more) channels

of command, two lines of budget authority, and two sources of performance and reward

- Thompson and Stickland

- the matrix structure was designed to keep employees in a central pool and to allocate them to various projects in the firm according to the length of time they were needed - Higgins

ADVANTAGES:
1. There is more efficient use of resources than the divisional structure 2. There is flexibility and adoptability to changing environment 3. The development of both general and functional management skills are present 4. There is interdisciplinary cooperation and any expertise is available to all divisions 5. There are enlarged tasks for employees which motivate them better

DISADVANTAGES:
1. There is frustation and confusion from dual chain of command 2. There is high conflict between divisional and functional interests 3. There are many meetings and discussions than actions 4. There is a need for human relations training for key employees and managers 5. There is a tendency for power dominance by one side of the matrix

PRESIDENT Vice President For Finance Vice President for Finance Vice President for Finance

Projects Manager

Construction Manager

Purchasing Manager

Contract Adminn Manager Contract Negotiator

Contract Negotiator Contract Negotiator

Project X Manger
Project Y Manager Project Z Manager

Engineer

Purchasing Specialist
Purchasing Specialist Purchasing Specialist

Engineer

Engineer