Question

QUESTION 1 Discuss and differentiate the forms of organization. (12 marks)

Answer 1

Three main organizational forms:

Functional: An organization must have numerous functions like, manufacturing, accounting, research and development, etc. Based on these functions, areas are segregated. The disadvantage of this form is lack of communication between the functional areas.

Divisional: This form is based on products, and operations. Suppose an individual project has separate division. Within that division all activities like, manufacturing, accounting, marketing, etc should be done. It helps to improve communication, because each division operates like a single unit. But it has a disadvantage too---there might be a conflict between the divisions because of under/over performance.

Matrix: This is the combination of functional and divisional forms. Suppose there is a project manager of a single project. Under his/her guidance divisions are created. Each division has divisional manager. Therefore, an individual working in a division has to give report to two persons – project manager, and divisional manager. Such form eliminates the disadvantages of functional and divisional forms. But creates a new disadvantage, which is “confusion”. Employees often get confused because of the existence of two bosses.