Share on Facebook A company's organizational structure determines how it approaches operating the business.
These are not mutually exclusive choices, because a business can have a formal structure and still operate with the characteristics that define an informal structure. However, understanding the differences between a formal and informal organizational structure can help you make the best decision for your business.
Formal Organizational Structure Elements In a formal organizational structure, the management and divisions within a company are typically written and explained so all employees understand how things work.
This documentation may take the form of an organizational chart that visually depicts how each level of management works to prevent misunderstandings.
Formal structure organizations usually have a hierarchical pyramid structure with a company president, CEO and senior managers at the top; mid-level managers in the middle; low-level managers at the bottom. Staff employees are expected to implement decisions and processes made at the levels above them, and they are not usually solicited for their opinions or ideas about how the company should operate.
Under this structure, your business operates by a system developed by your employees who have proven effective. This structure relies on relationships forged between staff members, cooperation between teams and communication that focuses on achieving shared goals.
Informal structures are unique for every company, because they are based on the personalities of your employees and collaborative techniques developed over time. Advantages of Formal and Informal Organizational Structures The primary advantage of a formal organizational structure is that it clearly delineates the roles and responsibilities of every employee, from the top level to a staff member.
The formal chain of command also keeps work processes under your control, because there is an established method of decision-making and implementation of your directives. If your business must respond to external influences that demand an organizational shift, an informal structure is fluid enough for you to make that change quickly and efficiently.
The primary disadvantage of an informal organizational structure is that things can become too informal, which can lead to disorganization, confusion and misinterpreted communication.
An analysis of the organizational structure in terms of flexible response to new situations must focus on the business environment. Rapidly changing marketplace conditions favor use of a matrix organization, while hierarchical organizations perform effectively in mature, stable markets. Within an industry, an environment can present opportunities to one organization and pose threats to another. (True/False). PepsiCo’s convenience and PET still water sales in the U.S. m USD PepsiCo’s operating profit margin worldwide % Global net sales of PepsiCo 29,m USD PepsiCo's operating profit share.
Another disadvantage is that because your business lacks a centralized management structure, employees may take advantage of that freedom to make decisions that are not well thought out. References 2 Business Dictionary: Informal Organization About the Author Sampson Quain is an experienced content writer with a wide range of expertise in small business, digital marketing, SEO marketing, SEM marketing, and social media outreach.
He has written primarily for the EHow brand of Demand Studios as well as business strategy sites such as Digital Authority.A content analysis of the content analysis literature in organization studies: Research themes, data sources, and methodological refinements.
Organizational Research Methods, 10 (1): 5– Strategic Analysis Tools Topic Gateway Series 4 Context In the current CIMA syllabus, students will study and may be examined on strategic analysis tools as part of the Management Level Paper 5, Integrated Management.
In addition, the tools are commonly used in many organisations for strategic decision making. 10 Quality Management Tools. The concept of quality management is applied in business of all sizes and all types.
It is a relevant in manufacturing as it is in health care or food services. Essay Mgt Pepsico Business Analysis I. PepsiCo Business Analysis: Part I Management/MGT Dr. Olivia Herriford PepsiCo Business Analysis: Part I PepsiCo is a world leader in convenient snacks, foods, and beverages with revenues of $65 billion and more than , employees.
The company headquarters are in Purchase, New York. PepsiCo Inc. Report contains more detailed discussion of the company’s business strategy. The report also illustrates the application of the major analytical strategic frameworks in business studies such as SWOT, PESTEL, Porter’s Five Forces, Value Chain analysis and McKinsey 7S Model on PepsiCo.
Comparative Analysis Problem: PepsiCo, Inc. vs. The Coca-Cola Company BYP PepsiCo ’s financial statements are presented in Appendix A.
Financial statements of The Coca-Cola Company are presented in Appendix B. Instructions (a) Based on the information contained in these financial statements, compute the following ratios for each company.