2.0 Organization Structure

Organization       

An organizational chart is a diagrammatic represent of a formal organization structure, 

(Figure 1)

Business Structure 

1. Sole Proprietorship

• owned by a single individual.
• has total control of and responsibility for his or her business
•  receives all profits, and can make important decisions quickly.

2. Partnership

• an association of two or more people acting as co-owners of a for-profit business. 
• partners share personal liability for all claims against the partnership, as well as share all profits and losses. 

3. Corporation

• a more complex form of business organization. 
• exists apart from its owners or shareholders and is a legal entity in its own right. 
• has its own rights, privileges, and liabilities apart from the individuals who form it.
• has shareholders who invest money in the business and therefore own it.
• shareholders hold an annual meeting at which they elect a board of directors to manage the company's daily affairs.

( Source: Mculloch, Linda. Organizational Structure . 2013. 1 September 2013. <http://sos.mt.gov/business/Models/index.asp> )

Organizational Structure                           

1. Bureaucratic Structures

• Have numerous layers of management, cascading down from senior executives to regional managers to departmental managers, all the way down to shift supervisors who work alongside front line employees.
• Decision-making authority has to pass through a larger number of layers than with flatter organizations.
• Advantage is that the Top-level managers in bureaucratic organizational structures exercise a great deal of control over organizational strategy decisions.
• Disadvantage is that it is bound by rigid controls and can also find themselves less able to adapt to changing conditions in the marketplace, industry or legal environment.
• Example of Bureaucratic structure: 

Figure 2:

                

Source: Ltd, Finntrack. "Management Class." 2013. Organization Theory and Design. 1 September 2013. <http://management-class.co.uk/learners/organisation.htm>.

2. Functional Structure

• Employees are grouped together and work is allocated based job functional. 
• There will be someone who is in charge of a function like marketing, and all of the marketing work for the entire entity will be performed by people in the marketing department.
• Other common functional divisions include finance, purchasing, production, sales, and so on.
• The advantage is that a worker who is an expert in his functional area can perform tasks with a high level of speed and efficiency, which enhances productivity. 
• The disadvantage is that there will be problems in teamwork as the different functional units may face difficulty working well with other unit
• Example of functional structure of a pharmaceutical company

Figure 3:

(Source: Sine, W. D., Mitsuhashi, H., & Kirsch, D. A. (2006). Revisiting Burns and Stalker: Formal structure and new venture performance in emerging economic sectors. Academy of Management Journal, 49, 121–132.)

3. Divisional Structure

• Each separate division of the organization is responsible for its own operations.
• Divisions can be defined based on the geographical basis, products/services basis, or any other measurement.
• Example: A food & service company that owns a  dining restaurant chain and a fast food brand may be organized by division. Instead of corporate level functional responsibilities for all marketing activities, there may be a casual dining marketing department and a fast food marketing department that are both independent of each other.
• Advantage is that it allows a team to focus upon a single product or service, with a leadership structure that supports its major strategic objectives.
• Disadvantage is that a company comprised of competing divisions may allow office politics instead of sound strategic thinking to affect its view on such matters as allocation of company resources.
• Example:

Figure 4:

(Source: N/A. " Organizational Design." 2013. 1 September 2013. <http://2012books.lardbucket.org/books/small-business-management-in-the-21st-century/section_16_02.html>)

4. Matrix Structure

• Matrix Structure is a combination of the functional and divisional structures. 
• The organization places the employees based on the function and the product.
• It uses teams to complete tasks.
• The advantage is that it can lead to an efficient exchange of information as different departments will work closely and communicate with each other frequently to solve issues which allows for quick decision making.
• The disadvantage would be the overhead cost which typically increases because of the need for double management. The extra salaries an organization must pay can put a strain on its resources.
• Example of matrix structure:

Figure 5:

( Source: University New Carter. "Contemporary Forms of Organizational Structures." 2013. Organizational Structure and Change. 1 September 2013. <https://new.edu/resources/contemporary-forms-of-organizational-structures> )

The Leader that I choose: Example of Apple Corporation organizational structure (Matrix Structure) led by Steve Jobs:

Figure 6:



( Source: http://fortunebrainstormtech.files.wordpress.com/2011/08/apple_org_chart_large11.jpg )

(Figure 7)
 In Figure 7, it's show Steve Jobs using Matrix organization structure organization chart to function the "Apple" business.

Opinion

     I think that having a matrix organization as it enable each country's Apple corporation to functioned within it's own capabilities based on the environmental needs and yet still maintaining a very general standardization requirement in all Apple Corps around the world. One example would be the pricing method of Apple, all Apple stores around the world charges the same price in all of the distribution store even though they are in different currency. Matrix structure also offers solution to keep the costing as low as possible as Apple has many of their headquartered manufacturing lines headquartered in Tucheng, New Taipei, Taiwan and also China. This saves a lot of cost as the labor cost of employees in these countries are cheap in comparison to the employees hired in America. This is due to the strong American currency which is the US Dollar.

     Even though Apple Corporation's adoption of this structure has its advantage, it also has its own downside as well. Competition among production lines will also prompt cannibalism. In this year, no matter how good the iPhone 5C ends up performing on the open market, I feel that Apple’s decision to launch two iPhones in one year rather than their conventional way of offering one device per year could result in self-cannibalism, as users who will have bought the iPhone 5S instead gravitate toward the cheaper option. Cannibalism also occurred between different products as in the case the iPhone cannibalizing the iPod for the past several years. In my opinion, all these happened because of the unclear boundary between all the Apple corporation production lines.

Bibliography

Nick Kolakowski, Slashdot, "Will the iPhone 5C Cannibalize the iPhone 5S?" 16 September 2013. 28th September 2013. http://slashdot.org/topic/bi/will-the-iphone-5c-cannibalize-the-iphone-5s/