- Business Strategy/Marketing Plans and Strategies
- Business Strategy/Marketing Plans and Strategies - Wikibooks, open books for an open world
- Revista ESPACIOS | Vol. 39 (Nº 33) Año
- Ways a Business Might Organize the Marketing Unit
To put it simply, this chart like a map that simply explains how your company works and how its roles are organized. Your chain of command is how tasks are delegated and work is approved. An org structure allows you to define how many " rungs of the ladder " a particular department or business line should have. In other words, who tells whom to do what? And how are issues, requests, and proposals communicated up and down that ladder? Your span of control can represent two things: who falls under a manager's, well, management Centralization describes where decisions are ultimately made.
Once you've established your chain of command, you'll need to consider which people and departments have a say in each decision. A business can lean toward centralized, where final decisions are made by just one or two entities; or decentralized, where final decisions are made within the team or department in charge of carrying out that decision. You might not need an org structure right away, but the more products you develop and people you hire, the harder it'll be to lead your company without this crucial diagram. To dive deeper into what all of these different organizational structure components are, check out my earlier post, " The 6 Building Blocks of Organizational Structure.
In this post, we'll explore how you can combine those components to form different types of organizational structures. We'll also highlight the benefits and drawbacks of different structure types so you can evaluate which is the best option for your company, division, or team.
Let's dive in. Organizational structures fall on a spectrum, with "mechanistic" at one end and "organic" at the other. Take a look at the diagram below. As you'll probably be able to tell, the mechanistic structure represents the traditional, top-down approach to organizational structure, whereas the organic structure represents a more collaborative, flexible approach. Here's a breakdown of both ends of the structural spectrum, their advantages and disadvantages, and which types of businesses are suited for them. Mechanistic structures, also called bureaucratic structures , are known for having narrow spans of control, as well as high centralization, specialization, and formalization.
Business Strategy/Marketing Plans and Strategies
They're also quite rigid in what specific departments are designed and permitted to do for the company. This organizational structure is much more formal than organic structure, using specific standards and practices to govern every decision the business makes. And while this model does hold staff more accountable for their work, it can become a hindrance to the creativity and agility the organization needs to keep up with random changes in its market. As daunting and inflexible as mechanistic structure sounds, the chain of command, whether long or short, is always clear under this model.
As a company grows, it needs to make sure everyone and every team knows what's expected of them. Teams collaborating with other teams as needed might help get a business off the ground in its early stages, but sustaining that growth -- with more people and projects to keep track of -- will eventually require some policymaking. In other words, keep mechanistic structure in your back pocket Organic structures also known as "flat" structures are known for their wide spans of control, decentralization, low specialization, and loose departmentalization. What's that all mean?
This model might have multiple teams answering to one person and taking on projects based on their importance and what the team is capable of -- rather than what the team is designed to do. As you can probably tell, this organizational structure is much less formal than mechanistic, and takes a bit of an ad-hoc approach to business needs.
Business Strategy/Marketing Plans and Strategies - Wikibooks, open books for an open world
This can sometimes make the chain of command, whether long or short, difficult to decipher. And as a result, leaders might give certain projects the green light more quickly but cause confusion in a project's division of labor. Nonetheless, the flexibility that an organic structure allows for can be extremely helpful to a business that's navigating a fast-moving industry, or simply trying to stabilize itself after a rough quarter.
It also empowers employees to try new things and develop as professionals, making the organization's workforce more powerful in the long run. Bottom line? Startups are often perfect for organic structure, since they're simply trying to gain brand recognition and get their wheels off the ground.
Now, let's uncover more specific types of organizational structures, most of which fall on the more traditional, mechanistic side of the spectrum. One of the most common types of organizational structures, the functional structure departmentalizes an organization based on common job functions. An organization with a functional org structure, for instance, would group all of the marketers together in one department, group all of the salespeople together in a separate department, and group all of the customer service people together in a third department.
The functional structure allows for a high degree of specialization for employees, and is easily scalable should the organization grow. Also this structure is mechanistic in nature -- which has the potential to inhibit an employee's growth -- putting staff in skill-based departments can still allow them to delve deep into their field and find out what they're good at. Functional structure also has the potential to create barriers between different functions -- and it can be inefficient if the organization has a variety of different products or target markets.
The barriers created between departments can also limit peoples' knowledge of and communication with other departments, especially those that depend on other departments to succeed. A divisional organizational structure is comprised of multiple, smaller functional structures i. In this case -- a product-based divisional structure -- each division within the organization is dedicated to a particular product line. This type of structure is ideal for organizations with multiple products and can help shorten product development cycles. This allows small businesses to go to market with new offerings fast.
It can be difficult to scale under a product-based divisional structure, and the organization could end up with duplicate resources as different divisions strive to develop new offerings. Another variety of the divisional organizational structure is the market-based structure, wherein the divisions of an organization are based around markets, industries, or customer types.
The market-based structure is ideal for an organization that has products or services that are unique to specific market segments, and is particularly effective if that organization has advanced knowledge of those segments. This organizational structure also keeps the business constantly aware of demand changes among its different audience segments.
Too much autonomy within each market-based team can lead to divisions developing systems that are incompatible with one another.
Divisions might also end up inadvertently duplicating activities that other divisions are already handling. The geographical organizational structure establishes its divisions based on -- you guessed it -- geography. More specifically, the divisions of a geographical structure can include territories, regions, or districts. It also brings together many forms of business expertise, allowing each geographical division to make decisions from more diverse points of view.
The main downside of a geographical org structure: It can be easy for decision- making to become decentralized, as geographic divisions which can be hundreds, if not thousands of miles away from corporate headquarters often have a great deal of autonomy. And when you have more than one marketing department -- one for each region -- you run the risk of creating campaigns that compete with and weaken other divisions across your digital channels. In order to fully understand the diagram below, you need to look at it from left to right: The customer acquisition process can't start until you have a fully developed product to sell.
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By the same token, the order fulfillment process can't start until customers have been acquired and there are product orders to fill. Process-based organizational structure is ideal for improving the speed and efficiency of a business, and is best-suited for those in rapidly changing industries, as it is easily adaptable. Similar to a few other structures on this list, process-based structure can erect barriers between the different process groups. This leads to problems communicating and handing off work to other teams and employees. Unlike the other structures we've looked at so far, a matrix organizational structure doesn't follow the traditional, hierarchical model.
Instead, all employees represented by the green boxes have dual reporting relationships. Typically, there is a functional reporting line shown in blue as well as a product- based reporting line shown in yellow. When looking at a matrix structure org chart, solid lines represent strong, direct-reporting relationships, whereas dotted lines indicate that the relationship is secondary, or not as strong.
In our example below, it's clear that functional reporting takes precedence over product-based reporting. The main appeal of the matrix structure is that it can provide both flexibility and more balanced decision-making as there are two chains of command instead of just one. Having a single project overseen by more than one business line also creates opportunities for these business lines to share resources and communicate more openly with each other -- things they might not otherwise be able to do regularly. The primary pitfall of the matrix organizational structure?
The more layers of approval employees have to go through, the more confused they can be about who they're supposed to answer to. This confusion can ultimately cause frustration over who has authority over which decisions and products -- and who's responsible for those decisions when things go wrong. While it might appear drastically different from the other organizational structures highlighted in this section, the circular structure still relies on hierarchy, with higher-level employees occupying the inner rings of the circle and lower-level employees occupying the outer rings.
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Revista ESPACIOS | Vol. 39 (Nº 33) Año
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Ways a Business Might Organize the Marketing Unit
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