A business plan that divides a company into different departments run by different managers

These 10 facts about space will blow your mind There is a difference between the departments a new business needs and those it can afford, at least during the start-up phase. As a business grows, the number of departments often grows along with it. The evolution of departments in a business closely parallels the evolution of the business itself. Imagine for a moment that two college friends want to start the Acme Widget company.

A business plan that divides a company into different departments run by different managers

You should think of organizational structures as communication flowcharts. Poorly conceived organizational structures will result in sluggish, inefficient communication in which managers at various levels are required to deliver information to too many people for too many levels of approval.

Well designed organizational structures will produce efficient communication channels and encourage fast, clean decisions. Functional The functional structure is the most commonly used by most businesses.

These departments are managed separately from each other by the department heads, and they only answer to the top level manager. However, the weakness is glaring - if a weak, poorly organized executive is at the top, then cases where the right hand fails to talk to the left will occur, causing frustrating problems.

Product A variant of the functional structure is the product structure, which is designed for larger companies.

a business plan that divides a company into different departments run by different managers

In this flowchart, a group of the highest executives sit at the top, while different products are separated into mini-companies. For example, a food products company might be split into beverages, snacks, dairy products, frozen dinners and condiments, with the managers of each segment reporting to the top.

Customer If your company offers services, such as healthcare, you can use the customer-based organizational structure. This is simply a variation of the product structure, in which the different business segments at the bottom are each split into a specific customer group - for example, inpatients, outpatients and free clinic patients.

a business plan that divides a company into different departments run by different managers

The managers of each segment would then report directly to the hospital president at the top. This is also designed to avoid overlap, confusion and redundancies.

Regional If your company gets really big and starts to go national or global, you need to split your company structure into regional segments. This is also a variant of the functional structure, with the top executives based in your home country at the top, with the reporting segments being comprised of regional managers.

This insures that your demands in different markets are being met in a localized fashion. Localization is the goal here, in all aspects - pricing, real estate and product lines. Large companies which have tried to use a single pricing strategy on a static product line across multiple geographic markets have often failed miserably, being eaten alive by smaller regional competitors.

Published: Mon, 5 Dec Here is background of BASF Company. BASF is leading chemical company on the world market. It has four production market departments: Europe, North America, South America and Asia. This is what a successful digital transformation looks like, based on research into the characteristics of enterprises that have succeeded with transformations in real life. The division of labor involves deciding who does particular jobs. Some workers or departments have special skills while others have different sets of abilities. Managers must organize these workers in certain ways to get jobs done. Jobs are then divided into different departments.

Matrix The matrix structure is often used by video game and movie companies, with various departments, all equal, working in tandem to produce a single final product.

In this case, a strong manager at the top - such as a video game publisher or movie director - acts as a team leader to insure that each segment receives the data they need to complete their separate task.

For example, in the production of a movie, one department might work on the music, the other might work on special effects, while another one works on the recorded film. You can also mix and match the best parts of each to create a customized structure.

What is 'Mergers and Acquisitions - M&A'

Just remember, the reason for having an organizational structure is to maintain communication and to make sure that there are as few redundancies as possible.

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