Question

When and under what conditions might managers change from a functional to (a) a product structure (b) a geographic structure (C) a market structure Be specific and identify one product or service where each applies. Present to the class.

Answer 1

a) A manager may change from functional to product structure if the manager wants the overall team to align themselves to suit the needs of the specific product. For example: If the company is planning to opt for customization of products, then a product based organization and team structure will help in giving the focus, so as to facilitate the same.

b) A manager may plan to change from functional to geographic structure if the company is expanding on a global scale and the scope of the project will get expanded on a global scale. In such a scenario, functional structure will not be effective in managing the project effectively. For example: The company is expanding and the company is entering in 3 new countries at the same time, then in such a scenario, the manager will opt for a geography based structure.

c) A manager may change from functional to market based structure if the taste preferences of the local customers is quite varying and the manager wants to align product as per their taste and disposition. For example: If a pizza company is present in India, China and UAE, then the manager needs to adopt a market based structure so as to adapt the product as per the taste of the local customers.