Strategy through Organizational Design
This resource presents the four types of organizational structures (simple, functional, multi-divisional, and matrix) and gives examples of companies that have used them. It then explores some of the newer ideas about organizational design and delves into the reasons to change for setting up control systems. Note the discussion on management fads.
The Basic Building Blocks of Organizational Structure
Division of Labor
General Electric (GE) offers a dizzying array of products and services, including light bulbs, jet engines, and loans. One way that GE could produce its lightbulbs would be to have individual employees work on one lightbulb at a time from start to finish. This would be very inefficient, however, so GE and most other organizations avoid this approach. Instead, organizations rely on division of labor when creating their products. Division of labor is a process of splitting up a task (such as the creation of lightbulbs) into a series of smaller tasks, each of which is performed by a specialist.