TYPES OF ORGANIZATION

1.Entrepreneurial organisation:

Foreign entrepreneurial organisation, the entrepreneur himself is the whole soul for the company; he works as a chief executive, the no. Of employees working in such organisation is very low and the strategy formulation and implementation functions are carried out by the owner as there is no scope for any specialist (strategist) for such organisation.

2.Functional structure organisation:

  • Mostly large and medium enterprises with limits number of products operate through functional structure.
  • In this type of structure are the functions required for strategy implementation can be classified into basic, secondary and supporting functions based on its nature and importance.
  • For e.g. in a manudafcturing company production, marketing, finance can be classified as the basic function.
  • These basic functions can be further divided into secondary functions like the marketing department can be subdivided functions like advertisement, sales, market research, customer services etc.
  • Apart from the basic functions there are supporting function like the HR department which can be further divided in functions like HRD, industrial relation, general administrative functions etc, such departments are created on the basis of requirement in the organisation and placed according to their role in strategy implementation.
  • Functional structure is based on specialisation of functions especially when the organisation grows from a smaller to higher one.
  • The main advantage of functional structure is that it helps in efficient and effective decision making and dealing with the problem of particular development.
  • This increases the optional efficiency, economic feasibility and provides the greater notification to the employer who is associated by particular department.
  • A serious limitation of a functional structure a type of organisation is that it does not work when the organisation follows product diversification.

3.Divisional structure organisation:

  • Growth in a particular lines of business through geographical market or through product diversification necessities the adaptation of divisional structure.
  • It is built around SBU’s where the organisation divides into autonomy units.
  • Each division has its own manufacturing, engineering, marketing function and is headed by a manger that is responsible for its development or performance.
  • Each unit is not a separate legal entity, but for the share of efficiency in the operations.
  • It is divided into various SBU’s
  • Strategic business units (SBU): in case of multiproduct and multi geographical area there are division created which are called SBU’s. The concept of SBU has evolved from the multidivisional structure of GE of USA to manage its multiproduct business. Many problems of effectiveness and efficiency can be overcome with this type of structure thus creating more autonomy, decentralisation of authority and development of explicit strategy for both, the firm as a whole and its various divisions.

4.Virtual organisations:

  • Virtual organisations are also known as networked organisation or modular organisation
  • It is a temporary network of independent companies which are linked by information technology to share skills, cost and access to each other’s market these type of organisations do not have a formal organisation chart or hierarchy.
  • They come together to undertake a specific venture and on completion of that venture are dismantled for a new project.
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