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HMGT 320 Week 3 Assignment
February 2, 2021
Product/Service Line Approach to Organizing Structure
Week 3 Assignment
HMGT 320
February 2, 2021
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HMGT 320 Week 3 Assignment
February 2, 2021
Product/Service Line Approach to Organizing Structure
There are two different structures to consider with a product/service line approach:
divisional structure and matrix structure. Within a divisional structure, departments and positions
are set up in a way that allows the organization to focus on the customers, products, and services
(Olden, 2019). Rather than organizing based on the workers’ specialties, divisional structure
breaks the organization up into divisions that would each be focusing on a specific type of
customer (Olden, 2019). Divisional structure is a great option for large organizations that have
several products or services (Olden, 2019). The following are some advantages to divisional
structure:
Ability to adapt to a changing environment
Improved patient and customer satisfaction
Faster decision making
Increased coordination within each division
Ability to focus on developing specialized products or services (Olden, 2019; Society for
Human Resource Management, 2015)
There are still some disadvantages to a divisional structure. For instance, increased coordination
within each division is an advantage; however, a disadvantage is that there is less coordination
and teamwork between the different divisions (Olden, 2019). The biggest disadvantage to
divisional structure is that the organization’s resources are duplicated (Olden, 2019). In fact, each
division usually has its own departments and teams that could easily be helping each other
(Society for Human Resource Management, 2015). They may also be wasting resources by
paying more for similar supplies across the divisions (Society for Human Resource Management,
2015). Divisional structure is a great option for large organizations that have several products or
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HMGT 320 Week 3 Assignment
February 2, 2021
services, but if the organization is needing a more complex option to the product/service line
approach, there is also the matrix structure (Olden, 2019).
The matrix structure is also a product/service line approach, but it combines the
divisional and functional structures (Olden, 2019). Within a matrix structure set-up, functional
management positions report up to the president and have lower-level employees who work
under them, for instance, nursing staff who work under the Vice President of Nursing (Olden,
2019). The matrix structure also includes divisional managers, or product/service line managers,
who are responsible for specific products or services, such as cardiology or primary care (Olden,
2019). Within a matrix structure, employees would report to two different managers – the
divisional manager and the functional manager (Society for Human Resources Management,
2015). Olden (2019) states that this structure is useful when an organization shares and
coordinates costly staff and resources among the different divisions in order to develop quality
products or services and improve customer satisfaction (Olden, 2019). Some advantages to using
the matrix structure include the following:
Expertise in functional and product/service aspects
Increased efficiency, products/services quality, and customer satisfaction
Ability to adapt to change
Increased coordination and communication throughout the organization
Functional and divisional partnership (Olden, 2019; Society for Human Resources
Management, 2015)
The complexity of this structure introduces several disadvantages as well. One disadvantage to
using this approach is that it requires significant time and money in order to train staff (Olden,
2019). Due to the structure of this approach, employees have to report to more than one manager,
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HMGT 320 Week 3 Assignment
February 2, 2021
which may cause confusion and/or stress (Olden, 2019; Society for Human Resource
Management, 2015). Another disadvantage to the use of a dual chain of command is that it
requires constant and consistent cooperation between the two managers to establish an
employee’s work assignments; the matrix structure relies on the relationship between the two
managers in order for it to be successful (Society for Human Resource Management, 2015).
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HMGT 320 Week 3 Assignment
February 2, 2021
References
Olden, P. (2019). Management of Healthcare Organizations: An Introduction, Third Edition: Vol.
Third edition. Health Administration Press.
Society for Human Resource Management. (2015). Understanding organizational structures.
Retrieved from https://www.shrm.org/resourcesandtools/tools-and-
samples/toolkits/pages/understandingorganizationalstructures.aspx
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