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Types of Business Organization

Types of Business Organization There are millions of successful businesses around the world. They range from local fruit stands to huge multi-national businesses worth billions of dollars. One common trait all these businesses share is that they have some sort of organization. Without organization a business is doomed to fail because it will be inefficient and that inefficiency will eventually cause its downfall. Most entities use one of four basic organizational designs to try to ensure smooth sailing. These four basic designs are Functional, Divisional, Conglomerate, and Matrix. Also, some companies use some type of mix of these four; they are said to use Hybrid Design. Anyone of these organizational choices cannot be said to be superior to another because companies are successful using each. Each of these designs of corporate organization has their strengths and their weaknesses when compared to the others, and in the coming pages I plan to explore both the set up of each of designs as well as their strengths and weaknesses. The functional design is based on the concept of functional departmentalization. This means that the entity is broken down into parts by the different functions these parts would perform. This design is also known as the U-form, or unitary form, because the company is broken down into its separate units. These companies tend to be rather tall in organization with many levels of authority. An example of this is a brick manufacturing plant having departments such as manufacturing, shipping, marketing, human resources, and finance. All of these departments would have their own Vice President who is in charge of everything that goes on in his or her department. They also would each have their own supervisors as well as their own workforce. This design of corporate organization is said to have reciprocal interdependence which means the department depends greatly on the other departments and cannot surv...

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Types of Business Organization. (1969, December 31). In DirectEssays.com. Retrieved 13:48, October 31, 2014, from http://www.megaessays.com/viewpaper/17243.html