Lecico (Example of Functional Structure )

 Lecico is applying a functional structure as the major objective through such vertical

structure is efficiency

 The organization structure is divided by function into separate departments where every

department focus on its departmental objectives, coordination and communication across

departments is developed through horizontal linkage methods. Employees in a functional

structure are grouped based on their skills and expertise

 Benefits of functional structure

1. High degree of technical experience is established

2. Enhance productivity and efficiency

3. Offers basis for economies of scale and cost reduction especially that the firm is

an efficiency organization

4. High quality technical problem solving

5. Minimizes the confusion of employees about whom they report to

6. Lower costs due to the lack of standardization across the firm

 Drawbacks of the functional structure

1. Reduces flexibility and response to environmental changes

2. Reduces innovation and creativity opportunities

3. Long decision making process

4. Minimal coordination among departments

 The vertical structure involves the following

1. High degree of specialization and division labor

3. High formalization

4. High degree of centralization

Vertical linkage methods

1. Hierarchy referral :Through the traditional vertical hierarchical chain of command

2. Information systems : through emails

Horizontal linkage methods

1. Information systems ,the ERP (Enterprise Resource planning) developed by Oracle to

integrate all business unit resources in one single data base that enable information

sharing across the business unit

2. Using task forces composed of cross functional members from different departments in

cases complex problems that are temporary and needs problem solving example quality

control problems and products defects

3. Direct contacts and meetings held between departmental managers example marketing

and manufacturing ,manufacturing and purchasing

 Aramex is applying a service (product )divisional structure as the major objective

through such flat structure is learning ,knowledge ,creativity and flexibility

 The organization structure is divided by services every division focus on its the product

objectives, accordingly easier coordination and communication across departments is

developed. Employees in such structure are not grouped based on their skills and

expertise but grouped around the specific product

 Drawbacks of divisional structure

1. Low degree of technical experience is established

2. Doesn’t offer basis for economies of scale and cost reduction especially that

the firm is an learning organization

3. Employees lack the technical problem solving

4. Higher costs due to the lack of standardization across the firm

5.

 Benefits of the divisional structure

1. Maximizes flexibility and response to environmental changes

2. Maximizes innovation and creativity opportunities

3. Short decision making process

4. Maximum m coordination among departments

 The flat structure involves the following

employee

ii. A flat hierarch of authority with wide span of control

iii. Low formalization referring to low paper work and documentation

iv. Low degree of centralization referring to high empowerment given across

the firm

 What adds to the horizontal communication opportunities of the firm is the highly

advanced information systems and office automation methods used including video

conferencing that enable the flow of information across the organization

Geographic Structure

 Our firm is called icon creation marketing agency ,it has 2 branches one in Cairo and one

in Alexandria serving mainly these two geographical locations with the following

functions :IT ,Refinance ,Sales ,and marketing

 This structure is very similar to the divisional structure except for it is divided by location

,or geographical areas like the company here in our case

 The company is applying a geographical structure as the major objective through such

flat structure is learning ,knowledge ,creativity and flexibility

 The organization structure is divided by geographical area every division focus on its

the market objectives, accordingly easier coordination and communication across

division is developed. Employees in such structure are not grouped based on their skills

and expertise but grouped around the specific area objectives ,needs and responsibilities

 Drawbacks of geographical structure

1. Low degree of technical experience is established

the firm is an learning organization

3. Employees lack the technical problem solving

4. Higher costs due to the lack of standardization across the firm

 Benefits of the divisional structure

1. Maximizes flexibility and response to environmental changes

2. Maximizes innovation and creativity opportunities

3. Short decision making process

4. Maximum m coordination among departments

 The flat structure involves the following

v. Low degree of specialization and division labor as tasks are many per

employee

vi. A flat hierarch of authority with wide span of control

vii. Low formalization referring to low paper work and documentation

viii. Low degree of centralization referring to high empowerment given across

the firm

 What adds to the horizontal communication opportunities of the firm is presence of the

team which is made up of employees representing different specialties mainly

marketing ,sales and creative designers ,the team is called business development team

which is mainly working on new customer solutions

 Metalife Alico insurance company is one of the excellent examples of matrix structure

that is used to get advantage of 2 types of organizational structures we had already

discussed the functional structure and the divisional structure as shown below

 The divisional part of the structure include a manger for each product (life insurance –

CEO

Life Accountig Human Legal

Invetsment Employee Employee Employee Employee Employee

Health
Employee Employee Employee Employee Employee
Insurance

investment-Health) ,the functional part includes accounting ,HR ,Marketing ,Sales and

legal functions

 A sales employee for example reports to 2 bosses the product manager and the sales

manager
  The divisional structure provide the benefits of high coordination across each product

,focusing on the product and customizing solutions to best serve the divisional objectives,

maximizes flexibility and response to environmental changes ,maximizes innovation

and creativity opportunities ,shorten the decision making process

 An extra advantage in such structure is that there are opportunities for technical expertise

and skills development as well as creativity and innovation

 Drawbacks mainly include the confusion of employee about reporting responsibilities ,

the large time needed ,the dual responsibilities to two bosses ,the high workload ,and

commitment to two managers’ objectives, and the power problems possibilities between

managers.

 To keep stability within the firm the structure had been designed to be more divisional

rathar than more functional ,which means that the primary power goes to product

managers not functional managers

 The firm has then a flat structure involves the following

ix. Low degree of specialization and division labor as tasks are many per

employee

x. A flat hierarch of authority with wide span of control

xi. Low formalization referring to low paper work and documentation

xii. Low degree of centralization referring to high empowerment given across

the firm

Metlife Alico as an example of organic organization

i. Low degree of specialization and division labor as tasks are many per

employee (Structural dimensions)

ii. A flat hierarch of authority with wide span of control (Structural

dimensions)

iii. Low formalization referring to low paper work and documentation

(Structural dimensions)

iv. Low degree of centralization referring to high empowerment given across

the firm (Structural dimensions)

v. High flexibility and responsiveness within a culture of adaptation

(contextual dimensions )

vi. Innovation strategy applied as a learning organization

Lecico (Example of mechanistic organization )

The firm is an organic firm due to the following

i. High degree of specialization and division labor as tasks are few per

employee (Structural dimensions)

ii. A tall hierarch of authority with narrow span of control (Structural

dimensions)

iii. High formalization referring to high paper work and documentation

(Structural dimensions)

iv. High degree of centralization referring to low empowerment given

across the firm (Structural dimensions)

dimensions )

vi. Efficiency strategy applied (contextual dimensions )