Divisional Structure. Matrix Structure

Divisional Structure

Divisional structure operates as a more decentralized version of the functional structure, in that the functions still exist within the organization, but the functions have been separated by product or region. In other words, the divisional structure decentralizes the organization into different units, each of which has its own functional department. For example, an organization might be divided into five regions across the United States. Each of those divisions will have its own marketing department, human resources department, and research and development department. Divisional structure can also occur at the product level if a company chooses to divide itself by the types of products in which it specializes or at the market level if a company addresses distinct markets separately.

Matrix Structure

Matrix structures were developed to create the best of both worlds, so to speak, and combine elements of the functional structure and the divisional structure. The matrix structure creates teams for organizational projects that need to be completed and, in creating teams, draws together the most qualified employees for the project from various areas of the organization. Instead of utilizing only department heads, which would be common in the functional and divisional structures, the matrix structure focuses more on project heads or managers who oversee a diverse group of individuals from different parts of a company. The matrix structure can become confusing, though, due to the greater level of decentralization, because it is not always clear who is in the leadership role in a group. A matrix structure is considered most effective for companies that operate internationally or across a wide range of geographical area.

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