El Professori

 Divisional Structure

Definition: Organizational Behavior Notes, "An organizational structure in which employees are organized around geographic areas, outputs (products or services), or clients." (McShane & Von Glinow, 2015, p.244).

Summary: The article entitled, "The Pros & Cons of 7 Popular Organizational Structures," written by Erik Devaney (2014) enlightens readers as to the different organizational structures that can be selected for a business. Devaney goes on to discuss the three different types of divisional structures which include geographical based, product or service based, or client based. As with any business decision, there is a downside to each choice. However, it is a decision that each company must make based on its own needs and requirements for such things as chain of command, span of control, and centralization. 

Discussion:  Could Pauline Meyer be exaggerating when she concludes that Starbucks Coffee Company's leadership in its industry is partly due to the fact that its organizational structure is a perfect choice for the continually growing business? One common denominator that seems to abound in the sea of many different organizational structures that exist is the fact that choosing the correct fit for a company is an extremely important factor in that company's ability to grow and succeed. Each company is different and while there are several organizational structures to choose from, one type that is popular for companies with multiple products, multiple markets, and or multiple geographical locations is the Divisional Organizational Structure.  While divisional structure is a great match for these types of entities, this particular structure has three different types within the main structure that must be decided upon. This type of layering seems to allow leaders to make certain as to the strongest area of a particular section of a business. These organizational decisions remind me of two Bible verses that encourage us to take the time to put things in order and plan, but at the same time pray and seek God in order that we may know His will for the ideas and the plans that have come into our minds and hearts. 1 Corinthians 14:40 states "But all things should be done decently and in order." Luke 14:48-30 also states "For which of you, desiring to build a tower, does not first sit down and count the cost, whether he has enough to complete it? God encourages us with His Word to seek Him, make plans, and set things in motion by His instruction in the most successful way possible. Deciding on the correct organizational structure is just one example of another one of those business decisions that must be done and would benefit us to seek God in this choice.  Although Devaney breaks down the fact that if a company is choosing divisional structure, it must then also determine which of those second layer structures will be the best fit for the company, he also concludes that each choice has a downside to it and that downside must be considered in the process of finalizing a decision. Typically, an entity with multiple products would choose a Product Based Divisional Structure.If a company has multiple markets then more than likely they would choose the Market Based Divisional Structure which would allow the divisions to be based around the markets or customer groups.The company with multiple locations which Devaney defines as territories, regions, or districts; may choose the Geographical Organizational Structure.  Devaney and Gillikin both agree that Divisional Structure has disadvantages and one of those disadvantages is that the divisions may desire their own identity and become incompatible with one another or the duties and activities may be duplicated unnecessarily which could cost the company's bottom line in the end. I am convinced that each company is different and that decisions concerning the structure of a company are important and must be considered and given much thought and prayer in order to make the right choice for the company. Do you see the different divisions within the Divisional Structure as overlapping or do you agree that those second layer decisions are just as important?

 References: 

Devaney, Erik. (2014, December 23).The Pros & Cons of 7 Popular Organizational Structures. Retrieved from https://blog.hubspot.com/marketing/team-structure-diagrams#sm.00037557310vwfkfr4x26ph18o1u8

Gillikin, Jason. (2016). Advantages & Disadvantages of Divisional Organizational Structure. Retrieved from https://smallbusiness.chron.com/advantages-disadvantages-divisional-organizational-structure

Meyer, Pauline. ( 2015, September 13). Starbucks Coffee Company's Organizational Structure. Retrieved from https://panmore.com/starbucks-coffee-company-organizational-structure