Increasing worker job satisfaction has shown to increase worker motivation, which in turn, increases productivity. You can distinguish it from vertical communication, which is the transmission of information between different levels of the organizational hierarchy. A comparison of the … Matrix organization for a small and large business: An outline, advantages, disadvantages, conclusion. Hybrid Organisational Structure: Exhibit 10.9 (a) illustrates the hybrid organisational structure. The expansion can also benefit from the synergy in competitive pricing, marketing, research & development, production, distribution, etc. Horizontal communicationis the transmission of information between people, divisions, departments or units within the same level of organizational hierarchy. They get more satisfaction due to the greater freedom and autonomy. Since horizontal organizational structure emphasizes the group, when a group works well together, everyone benefits. Horizontal organizational structure in an organization places emphasis on the collective goal of the company. Different levels of production. If the company ends up with the majority of the market share, then the situation is known as a monopoly. Advantages: 1. An employee-centered approach to leadership is an important aspect of horizontal organizational structure that has gained attention in the past few years. Functional expertise and efficiency. First and the most important advantage of this organizational structure type is the efficient project organization. Every feedback and opinions of employees are considered. Line organization assumes that direct authority is exercised by a superior over his subordinates. I have discussed all of these in a very precise manner along with proper examples. 3. The overall income of the company increases if the integration goes well and the company develops. • Due to small number of employees under ach manager, it helps to closely supervise which has an outcome of good performance. The horizontal organizational structure and the employee-centered approach to leadership focus on the ability of employees to come up with innovative solutions. If you’ve had a job, you likely worked in a functional organizational structure.The functional structure is based on an organization being divided up into smaller groups with specific tasks or roles. Secondly, the cross-functional structure makes optimum utilization of resources across different teams. There must be strategies in place to deal with the potential negatives which like to occur under this structure. 3. Horizontal Integration is a process in which a company increases its production of goods and services to strengthen its position in the market place. Companies can achieve economies of scale by increasing its production and lowering its cost. Exhibit 10.9 (b) illustrates a combination structure. It is discouraging for many governments due to the lack of competition from other organizations. The economy of scope describes the situations in which the long-run average and marginal cost reduction of a company happens due to the production of complementary goods and services. 4. In this story, We will discuss What Are The Advantages And Disadvantages Of Horizontal Integration? Why without a clear strategy, your innovation may go off track. It is very essential for a company that wants to acquire different markets. In this type of organisational structure, businesses are organised according to their roles and skills into smaller groups or departments. Adaptability and flexibility in divisions. Economic incentives can be tied to performance. The expansion can be done in the same market or in different markets depending upon the company. The vertical organizational structure also has lots of disadvantages. This allows for workers to focus and invest time and energy on company goals. It can also benefit the company by creating an economy of scope, the economy of scale, and increase product differentiation. This business analysis case determines that Disney’s corporate structure is designed to promote interdivisional cooperation for competitive advantages. Last but not least, the structure is quite flexible; business managers could easily adjust the priorities based on di… Leadership Styles in Production Management, Practical Management: Structural Dimensions of an Organization, Duke Fuqua School of Business: Women’s Perceived Weaknesses Are Actually Leadership Strengths, Mind Tools: Team Effectiveness Assessment, How to Turn off Assistive Touch on an iPhone. The communication barriers amongst divisions are low or non-existent and the need to react to external environment changes is high. The advantage of this horizontal organizational structure is that it allows decisions to be made faster. Horizontal communication is often referred to as 'lateral communication.' Flat structure is usually adopted by the smaller organizations. Shiplett et al. This may include, for example: 1. sales 2. marketing 3. production 4. Nonprofits Boards Are Very Rich And Very White. Faster decisions create highly satisfied customers and often improves employee morale. Any business employing more than a few people needs to organize itself into a structure that defines how information travels within the company, and how workers in different roles and at different levels of responsibility relate to each other. Apple’s Empty Grandstanding About Privacy. Line organization is also known as vertical organization or departmental organization. They pointed out that “the degree of authority exists in all organization as on uninterrupted scale or series. Flat structure is also known as horizontal structure. The competitor may lack the abilities and knowledge that the company already possesses. A flat organization (also known as horizontal organization) structure is an organization structure in which the organization has a few or no levels of middle management between executives and staff. Horizontal mergers are heavily scrutinized under anti-trust laws. The larger organization often becomes too wide and inflexible to manage. By merger or acquisition, the companies can create synergies and take advantage of existing knowledge and experience rather than starting from level zero. Because all resources of the project are dedicated to project tasks and assignments. Team members may … It empowers employees by emphasizing training and giving employees the tools needed to succeed. This organization is based on scalar basis. 6. There may be only one layer or a few layers between the top of the management and the lower level employees. The focus is on the processes and procedures that directly affect products rather than individual jobs. J.D Mooney and A.C Reiley introduced the idea of line organization. Rather than a power-struggle, the focus group is working toward achieving the goal. Elon Musk and The Ugly Side of Innovation. Unlike the vertical organizational structure where emphasis is placed on the individual, the organizational structure emphasizes teamwork. Geographic organisation is an organisation structure where company hierarchy is divided on the basis of geographic location in which company operates which is headed by a centralised head office. The advantages and disadvantages of Tall Hierarchical Structure are as below: Advantages • There is a good relation between the managers and the employees. Vertical structure is likely to be rigid, which might hamper the company from accepting innovative concepts and trap a company in outdated techniques. Instead of the C-Suite needing their middle managers to collect information assets from the front-line staff and then reporting it to them, they can obtain the information directly. Now that we have seen the advantages and disadvantages of the divisional structure, it is time that we evaluate whether to use it or not. This happens because the cost is distributed in a large number of goods. It is discouraging for many governments due to the lack of competition from other organizations. 1. Thirdly, it’s cost-saving since they can save a great amount of money from hiring the middle management. This will help the parent company in various ways such as the reduction in costs of international trade, the experience of the market, some liberation in rules and regulations. Decentralised decision making. A divisional structure can be extremely efficient and successful if practiced in a large organization. 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