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Multi-divisional forms became popular in the United States in the 1960s. Companies that did not use it tended to develop more slowly. [2] During the 19th and early 20th centuries, the unitary form (U-form) was the most common structure of the largest industrial companies.
When using divisional structures that are organized by either markets or geographic areas they generally have similar functions and are located in different regions or markets. This allows business decisions and activities coordinated locally. The disadvantages of the divisional structure is that it can support unhealthy rivalries among divisions.
Choosing a structure for a company is an important decision and must be strategically thought out because it could either aid or harm the making of business. The structure must also be a good fit for the type of activities, goals, and vision of the company. [3] The organizational structure is a reflection of how conveniently business is conducted.
A matrix organization. Matrix management is an organizational structure in which some individuals report to more than one supervisor or leader—relationships described as solid line or dotted line reporting, also understood in context of vertical, horizontal & diagonal communication in organisation for keeping the best output of product or services.
The examples and perspective in this article deal primarily with the United States and do not represent a worldwide view of the subject. You may improve this article, discuss the issue on the talk page, or create a new article, as appropriate.
Internal environment, regarding the strengths and weaknesses of the organization's resources (i.e., its people, processes and IT systems). Strategic decisions are based on insight from the environmental assessment and are responses to strategic questions about how the organization will compete, such as: What is the organization's business?
Each major product area in the corporation is under the authority of a senior manager who is specialist in, and is responsible for, everything related to the product line. LA Gear is an example of company that uses product departmentalization. Its structure is based on its varied product lines which include women’s footwear etc.
Divisions are distinct parts of a business. If these divisions are all part of the same company, then that company is legally responsible for all of the obligations and debts of the divisions.