Business Is Organized Primarily for Efficiency Purposes,

¶ … business is organized primarily for efficiency purposes, evaluate the relationship between organizational structure and organizational effectiveness from the attached readings.

The organizational structure will provide a business with the ability to maximize their productivity and profit margins. This is achieved using a variety of models during the process the most notable include: the functional, divisional and matrix. The functional structure is when there is a head corporate office which is running the sales, marketing, IT, finance and operations. This is designed to streamline the decision making process and create an environment that will help the organization to maximize its productivity and profit margins. (Stanford 2007) (Fritz 1996)

The divisional approach is concentrating on reducing decision making. This is taking place by having the CEO serve a central role and each segment perform different functions. The way that this is achieved is through minimizing outsourcing and adapting to challenges in the operating environment. In many cases, this model can be adjusted to account for other operations around the world and to seize upon new opportunities. (Stanford 2007) (Fritz 1996)

The matrix approach is similar to the divisional strategy. The differences are these entities are reporting to the main divisions of the firm. They will answer directly to the department heads. These individual will report to the CEO of the organization. In these situations, this model is used to for entities which require highly specialized skills. At the same time, there is an emphasis on controlling the cost structure for producing or delivering the end merchandise to customers. (Stanford 2007) (Fritz 1996)

These different models are utilized to increase efficiency by: streamlining decision making and ensuring firms can adapt with unique challenges they are facing. This gives them the ability to compete on a global scale and adjust to changes in their operating environment. When this happens, these entities can quickly evolve and transform. It is at this point where they will become more competitive and flexible. In many ways, one could argue that these approaches allow a business to be able to maximize productivity. This is based upon the structure and its ability to enhance its effectiveness. (Stanford 2007) (Fritz 1996)

Moreover, other theories have been continuing to evolve. This is occurring through creating alternative structures that will subdivide the managerial responsibilities. A good example of this can be seen with a pure project organization. This is when a traditional model is used by having the CEO running the firm. While President, will have the Vice Presidents running various divisions. They oversee the day-to-day operations of the company. (Meredeth 2011) (Jelinik 2010)

To streamline operational efficiency, these entities will establish pure project organizations. This is when the President will work with the Program Manger, VP of Marketing, VP of Manufacturing and VP of Research & Development. Their goals are to have each of the Vice Presidents oversees specific aspects of the project. This makes it easier to create new products which are in the process of being developed. (Meredeth 2011) (Jelinik 2010)