Question

(a) In the organizational structure and design, the divisional structure is often considered almost the opposite of a functional structure. Do you agree? In your own words, explain the major differences in these two approaches to departmentalization.

(b) Ngan Picture Studio is a photography studio that has been operated by the Ngans family for nearly 20 years. Despite the introduction of modern mall studios and digital photo studios, Ngan Picture Studio has continued to serve a stable, traditional, family-oriented clientele. The Ngans are not especially interested in expanding their market share or their product line. With regard to organizational structure, would an organic or a mechanistic structure be more appropriate for Ngan Picture Studio? Explain.

Answer 1

The differences of departmentalization are explained below:

Divisional Structure	Functional Structure
The divisional structure is where the functions of organization is divided, the marketing will have a different division of sales in the organization.	The functional structure will have different division in the organization as where it will include human resource department, finance department, marketing department etc.
The members will be aware on their responsibilities and act according to that because the work would be allocated to them.	The groups together will focus to increase the performance of the organization as these departments involve high in improving the business activities.
Can be used in large size organization	This structure can be used in small size organization.
The resources needed more in this type of division, so it is expensive.	Limited resources are needed for this structure, so less cost company can invest.

Ngan Picture Studio would have a mechanistic structure, the reason provided below:

Mechanistic Structure:

The mechanistic structure can be defined as an organized structure where in it is very formal and hierarchy based. This kind of structure is used in stable organizations.

1.    Since it is hierarchy based and proper structure there is no confusion in the reporting system. Eg. Due to its horizontal structure employees have clarity on whom to report to and what is expected out of them.

2.    Decision making process is very effective in this kind of structure. Eg: Involvement of top management only in decision making avoids confusion and chaos and also it would be strategic in nature.

3.    Stable and non-flexible in nature.Eg: Typically manufacturing organization has a stable structure in place. Ngan is a family business where they don’t want to opt for increased market share and they expect on stability of their business in the market.