Free Essay On An Organizations Structure

Ford Motor Company changed from functional structure to a divisional structure. The company carried out its operations in different parts of the worlds where all products were developed, manufactured, and sold independently. This focus allowed Ford to be more responsive to needs of local customers but it deprived the company bargaining power of suppliers. Such bargaining power could not help the company create competitive advantages, especially price advantages. The design also limited the company’s access to critical components of innovation. The hierarchical functional organizations within each operation region reduced product development and cooperation and interaction between functional groups and the project teams. The company needed a new design to build cooperation that innovation so deeply depends on. Ford Motor Company comprises of different divisions and each division has its own goals. The managers are accountable for success of failure of their divisions. This helps the managers to focus on improved performance of the company. This strategy has helped Ford improve innovation and maintain global leadership in the automotive industry for many years.
Yahoo Company shifted from divisional structure to a simple structure in 2001. The change was to deal with situations of bankruptcy that the company was undergoing. This structure was to improve clarity and simplicity in the organization decision making. For example, sales and pricing decisions were made by organized global teams. The new design was to shift decision making to the local sales teams. It eliminated several layers of middle management, increased local accountability, and saved the company costs of about $1 billion within two years. The simpler structure also concentrated decisions related to changing from analog to digital technology that was critical for the success of the company products and services. It also helped accelerate the pace of new product introductions. The turnaround was critical for the success of Yahoo Company.