(Solution) Evaluate the advantages and disadvantages of different types of organisation structures, including the reasons underpinning them

Functional/bureaucratic structure
This is the most conventional approach/structure where people performing similar tasks or with a similar specialty are organised into one group. For example, accountants belong to the finance department while those who have specialised in marketing are found in the marketing department (Point Park University Online, 2022). Real-life examples are Apple, Starbucks, and Amazon. Reasons underpinning this structure are that it works best for large companies with distinct product offerings and those operating in diverse geographical locations (Organimi Inc., 2021).
Merits– Functional structures allow people with similar competencies and abilities to collaborate on projects. Secondly, since employees are grouped according to their skills, there is greater efficiency and effectiveness in functional departments. Employees already have requisite skills and their roles do not change. As such, they will spend very little, if any, time on learning. Functional structures also promote teamwork within groups (Indeed Editorial Team, 2020).
Demerits-Grouping of employees into functional departments may hinder inter-departmental communication, which could inhibit effective functioning in the company. The structure may also encourage unhealthy competition among departments especially if the executive director does not provide direction (Indeed Editorial Team, 2020). It may also hinder decision-making effectiveness as authority figures must be consulted before employees can make any decisions. In case managers or authority figures are not available when time-sensitive projects are being worked on, overall progress is affected.
Divisional/decentralised structure
Separate divisions are created to cater for the different products or projects that the organisation deals in. Unlike in functional structure where grouping is according to skills, grouping in divisional structures is done according to organisational outputs (Indeed Editorial Team, 2021). An organisation that uses the divisional structure is United Technologies Corporation, one among the biggest industrial firms in the United States. UTC has many divisions that include Pratt, Collins Aerospace, Otis and Carrier (Daft, 2020). Companies choose this structure when they shift to more complex projects or when they experience substantial growth such that the traditional hierarchical model no longer works adequately for them. It is also suitable for companies operating in multiple regions and with many products (Accounting Tools, 2022). Nonetheless, small companies with self-managing groups may also use the divisional structure. For instance, advertising agencies with dedicated staff together with budgets catering for major clients can use the structure (Gillikin, 2019).
Strengths There is greater accountability for actions as well as results since every division is operated by a specific management group. Divisional structure is a great approach for companies to deal with market competition. Managers can swiftly shift their business’ direction to capture changes in the local market. Thirdly, a divisional structure facilitates cultural relevance and responsiveness because managers can customise divisional cultures and product offerings to meet local market needs (Accounting Tools, 2022).
Weaknesses Divisional structures are quite costly because divisions operate as independent entities, each having its complete function set. They may also create unnecessary rivalries between divisions. This happens when divisions are not incentivised to collaborate or pursue a common purpose. Third, compartmentalisation of skills by divisions could also hamper skills transfer across firms, and this affects organisational performance (Accounting Tools, 2022).  
Analyse connections between organisational strategy, products, services and customers. (AC1.2) Short references should be added into your narrative below. Please remember to only list your long references in the reference box provided at the end of this section. Word count: Approximately 400 words.

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