An example of Product Based Organisational structure.

An example of Product Based Organisational structure.

ZIMSEC O Level Business Studies Notes: Product based Organisational structure

  • This is when organisational operations, departments, duties and tasks are grouped based on particular lines of goods and services.
  • The organisation’s structure is based on major product lines and services
  • This usually  involves organising the business into departments, each of which focuses on a different product
AdvantagesDisadvantages
The structure is market oriented (Focused on markets)There is duplication of resources and functions e.g. Accounting departments may be required across all departments
Different departments are forced to coordinate accross all functionsThere is less top management control
Is flexibleComplicates the coordination process
An entrepreneurial spirit is fosteredHostile competition between departments can prevent the organisation from achieving its strategic goals
Friendly competition between departments can encourage hard work

To access more topics go to the O Level Business Notes page.

 

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