What Are the Pros and Cons of the Three Main Organizational Archetypes: Functional, Matrix/hybrid, Divisional?Essay Preview: What Are the Pros and Cons of the Three Main Organizational Archetypes: Functional, Matrix/hybrid, Divisional?Report this essayORGANIZATIONAL STRUCTUREWhat are the pros and cons of the three main organizational archetypes: functional, matrix/hybrid, divisional?Functional:Pros: Each function is composed by members sharing similar technical background organized by different levels and reporting to one head manager. The creation of job descriptions and layers (after a process of delegation and the introduction of a managerial level) clarify organizational responsibility and an efficient allocation of different tasks. Moreover, with the introduction of support functions (staff administrators located at head office), the need of an accurate accountability is satisfied. Cons: The lack of a holistic view on the products themselves and of an active response to the market needs, due to the excessive specialization. Therefore, disputes and different objectives arise among functions as well as a consisted slow-down in communication and decision-making, due to the increased layering.Matrix:Pros: The possibility to exploit the “best of both worlds”, the efficiency and technical sophistication of a functional organization integrated by an overall view on common priorities.
Cons: Competition between product leaders in having the highest competences devolved and resources allocated. The presence of 2 heads with ambiguous level of authority arises confusion and misalignments. Moreover, the growing complexity of each product requires the development of separated strategies.Divisional:Pros: An organization divided in business units based on products guarantees a rapid response to market changes, and the development of specific strategies and a greater flexibility, with the possibility to merely add or dismiss divisions. However, supporting functions (Administration, divided into Controlling, Personnel and Legal) are maintained common to each business units, reporting directly to the CEO’s office.
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Cons: Divisions and the need to control and manage a company. The divisional structure is limited.
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Proportionality: A hierarchy that is split into two areas including the management and business units. A divisional structure is also limited by a failure to coordinate actions to achieve a goal. As the product organization loses its competitiveness, any reorganization strategy must be more precise and flexible—a problem that may have to be addressed in order to increase a company’s competitiveness.Cons: Disagreements or disputes between management and business unit. When divisions form, the leaders, including their own corporate board, have a great deal of control over the team and ability to do important work. As a result, their ability to function as a team unit is also compromised. A common strategy that is supported by a management organization or by the leaders at the head of the company has the greatest possible impact on the team, and can even lead to a large organizational transformation.In the final analysis, the more competitive the business unit, the longer a competitive competitive, multi-tier unit will continue to exist.
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Cons: A lack of organization that encourages competition, which can lead to stagnation, and a lack of organizational cohesion.
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Cons: The leadership is prone to oversharing. Leaders are prone to oversharing.—Brianna Palmer, CEO & CEO—New York Times—
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Cons: Too often directors and executives are expected to create new processes for managing divisions and have little oversight of each. A leadership style that promotes transparency and responsibility is not easy to implement. It can also be seen as being overly hierarchical. As a result, managing a division is not an easy goal.
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Conclusions:
​The lack of control, organization complexity, confusion, and misalignments is a key problem for businesses, particularly when the needs of the corporate organization are high. Effective management practices create a more transparent and collaborative product culture that addresses the problems of competition and competition-conscious decision making, and leads to a more competitive product culture. The need to have all stakeholders involved in the creation of a more efficient, unified product culture can result in a better business for shareholders and consumers, as well as for business stakeholders in the process of creating new leadership roles. This focus on leadership and management style also allows the company to remain dynamic, adapt itself and build new leadership and organizational capacities.​
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Conclusions:
​The key is to have responsible management. It is the understanding of organizational structure that is critical, and management is often required.
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Conclusions:
​To create a more effective leadership style, organizations must consider the needs and challenges of competition, which is especially important when the company’s competitive needs are high.​