Organizational structures

The study conducted by SBS Consulting aims to analyse and compare different types of organisational structures used in international companies. The study examines three main types of structures: line-staff, divisional and matrix. It provides examples of their implementation in various companies and analyses the advantages and disadvantages of each structure.

Line-staff organisational structure

The structure example:

Chief Executive Officer (CEO)

• Operations
• HR
• Logistics
• Finance

Features of functioning

• Staff specialisation: Strong vertical management and a unified approach.
• Economy of resources: Economies of scale and factor costs.
• Aimed at routine tasks: Suitable for companies with recurring processes.
• Need for cross-functional communications: Management has limited perspective.

Examples of companies:

• Automotive industry: Tesla, Mercede
• Banks: JP Morgan Chase
• Retail: Amazon, Walmart
• Food industry: Starbuckss
• Electronics: Apple
• Telecommunications: Airtel

Divisional organisational structure

The structure example:

Chief Executive Officer (CEO)

• Division 1
• Division 2
• Division 3

Особенности функционирования

• Full profit responsibility of the divisions: Flexibility to adapt the company's style and culture to the different requirements of the product segments.
• Redundancy of functions and resources: Possibility of duplication of efforts.

Examples of companies:

• IT: Microsoft, Oracle, Alphabet
• Banks: HSBC, Citibank
• Telecommunications: Comcast
• Retail: Walgreens Boots Alliance
• Food industry: Coca-Cola, PepsiCo
• Automotive industry: General Motors
• Light industry: Uniqlo, Puma
• Logistics: DHL, DSV

Matrix organisational structure

The structure example:

Chief Executive Officer (CEO)

• Function 1
• Function 2
• Function 3
• Product/project 1
• Product/project 2
• Product/project 3

Features of functioning:

• Dual reporting lines: to the Head of Function and to the Project Team Leader.
• Flexibility: Facilitates flexibility at the product development level and speed of execution of tasks internationally.

Examples of companies:

• IT: Meta (Facebook)
• Telecommunications: AT&T, Reliance Jio
• Banks: Goldman Sachs
• Retail: The Kroger Co, Costco
• Chemicals: BASF, Bayer
• Light industry: H&M, Adidas
• Automotive industry: TRW-ASG
• Electronics: General Electrics, Philips

Examples of companies with detailed organisational structures

Apple

• Organisational structure: Line-staff
• Functions: Design, Hardware, Hardware Technology, Applications, Machine Learning and AI, Marketing, Operations, Retail, HR, Finance, Legal, Sustainability and CSR, Corporate Development, Corporate Communications.

Amazon

• Organisational structure: Line-staff
• Functions: Finance, Applications, Customer Service, Amazon Studios, Business Development, Technical Development, Legal, Media & Entertainment, HR, Hardware.

HSBC

• Organisational structure: Divisional
• Principle: Geographical division
• Regions: North and Latin America, Asia, Europe
• Functions: Finance, Operations, Legal, New Product Development, Corporate Security

PepsiCo

• Organisational structure: Divisional
• Principle: Geographical division
• Regions: North America, Latin America, Africa, Middle East, South Asia, Asia Pacific, Europe
• Functions: Finance, Operations, Production, Design, HR, Legal.

Meta (Facebook)

• Organisational structure: Matrix
• Products and projects: Instagram, Messenger, WhatsApp, AR/VR, AI, Blockchain
• Geographic division: North America, Latin America, Europe, Africa, Middle East, Asia-Pacific region
• Functions: Finance, Operations, IT, Marketing & Analytics, Technical Development, Legal, GR, HR

Conclusion

The study shows that the choice of organisational structure depends on the company's strategy and mission. Line-staff structures are suitable for companies with recurring processes and the need for strict control. Divisional structures are effective for large international companies where flexibility and adaptation to local markets is required. Matrix structures provide a high degree of coordination and flexibility, especially for innovative and fast-growing companies.

The right choice and adaptation of organisational structure to the company's characteristics can significantly improve its efficiency and competitiveness.