Page 71 - APM Integrated Workbook STUDENT S18-J19

Business structure and performance management

Organisational forms

Advantages for Disadvantages for
Organisational Information performance performance
form needs management management
Functional –  Data passed from  Lower costs  Hard to grow or
groups together functional to since roles not diversify.
employees that upper level. duplicated.  Difficult to assess
undertake similar  Upper level  Better performance of
tasks into aggregate, standardisation individual
departments, e.g. analyse and and control. products/
production, feedback to markets.
finance.  Defined career
functional level.
path and sense  Dysfunctional
The information of belonging for behaviour by
system (IS) should specialists. functional
aid this managers.
communication.
 Slow decision
making.

Divisional –  Autonomy results  Easier to grow/  Cost of role
organisation split in information diversify. duplication.
into autonomous being required at  Easier to assess  More differences
divisions divisional level, performance of to standards and
(subsidiaries or e.g. for budgeting individual control.
strategic The IS should products/
business units) deliver the correct markets.  Dysfunctional
based on information to behaviour by
products or divisional  Faster decision divisional
regions. making and managers.
managers, in an utilises local
appropriate form knowledge.  Difficult to set up.
and on a timely
basis.  Autonomy
motivating.
 Clear
responsibility for
decisions.
 Top management
can focus on
strategy.

61