Divisional structure (FedEx)

 The divisional structure is a type of organizational structure that groups each

organizational function into a division. ... Each division contains all the necessary

resources and functions within it to support that product line or geography (for example,

its own finance, IT, and marketing departments). Each division within this structure can

correspond to either products or geographies of the organization. Product divisional

structures may be characterized as follows .Product departmentalization: A divisional

structure organized by product departmentalization means that the various activities

related to the product or service are under the authority of one manager. A divisional

structure provides advantages for large organizations. Each division can specialize and

focus its efforts on its particular product, service or market and not be distracted by

competing interests. Decisions that you need to make are made by employees closest to
the specific issues and problems. Not only are these employees closer to the problem,

they also tend to have the specialized knowledge and skills best suited to resolve the

problem. This structure provide the organization with higher flexibility to react to the

environmental changes, such type of structure allows a high degree of horizontal

information linkage as all functions grouped under each product or service focus on the

product related objectives solving the problems related to such product ,this type of

structure serves the organizational goals and intents rathar than the traditional most

commonly used functional structure ,this structure is suitable for learning organization

not efficiency organization as this structure serves creativity and innovation .This

structure is much more oriented towards verbal communication rathar than written

communication with more decentralization allowed enabling delegation of authority

down to the bottom of the organization. The firm uses extra form of horizontal

communication which is already embedded within the structure through the role of full

time integrator with full authority over his product (product /service manager) which is

the task forces including representatives from multiple functions from all over the

organization to work on solving major organizational problems and difficult situation. A

firm with divisional structure is a flat or a horizontal organization with limited number of

reporting levels referring to wide span of control .

 The firm keeps a matrix structure combining between function structure (HR, Marketing,
Sales, Construction, accounting &finance) and divisional based structure

 Due to the nature of the business which is construction projects the divisional structure is
divided by projects example West Cairo project manager, HR ,marketing ,sales has dual
reporting responsibility one to the HR manager and the 2nd to the project manager

 The project manager is a full time integrator ,integrator the functions under his own
authority and responsibility allowing the highest level of horizontal communication and
coordination across departments

 The problem with the matrix structure is the power balance between divisional managers
(project manager) and the functional managers ,but the firm has resolved such issue by
keeping the structure an un balanced one ,the matrix structure is mainly divisional with
the major authority goes to the project managers while the functional managers
responsibility is secondary because it is difficult to keep a balanced matrix structure
between divisional and functional structure due to the dual authority and power conflicts
that might arise

 The matrix structure has the following characteristics

1. Forces coordination across functions

2. Improves flexibility and fast response

Bisco Masr (Geographical Structure )

CEO

Accountig Human
Projects Marketing Sales Construction
&Finance Resources

Project A Employee Employee Employee Employee Employee

Project B Employee Employee Employee Employee Employee

Project C Employee Employee Employee Employee Employee

 The geographic structure is a type of organizational structure that groups each

organizational function into a division. ... Each division contains all the necessary

resources and functions within it to support that product line or geography (for example,

its own finance, IT, and marketing departments). Each division within this structure can

correspond to geographies of the organization. A divisional structure organized by

regions means that the various activities related to the region are under the authority
of one manager. A geographic structure provides advantages for large organizations.

Each division can specialize and focus its efforts on its particular region, or market and

not be distracted by competing interests. Decisions that you need to make are made by

employees closest to the specific issues and problems. Not only are these employees

closer to the problem, they also tend to have the specialized knowledge and skills best

suited to resolve the problem. This structure provide the organization with higher

flexibility to react to the environmental changes, such type of structure allows a high

degree of horizontal information linkage as all functions grouped under each product or

service focus on the region related objectives solving the problems related to such

region ,this type of structure serves the organizational goals and intents rathar than the

traditional most commonly used functional structure ,this structure is suitable for learning

organization not efficiency organization as this structure serves creativity and

innovation .This structure is much more oriented towards verbal communication rathar

than written communication with more decentralization allowed enabling delegation of

authority down to the bottom of the organization. The firm uses extra form of horizontal

communication which is already embedded within the structure through the role of full

time integrator with full authority over his product (product /service manager) which is

the task forces including representatives from multiple functions from all over the

organization to work on solving major organizational problems and difficult situation. A

firm with divisional structure is a flat or a horizontal organization with limited number of

reporting levels referring to wide span of control .The firm is a flat organization with

limited number of reporting levels ,wide span of control and high degree of coordination

and horizontal communication

HR
Cairo and
Upper Egypt
Manufacturing
East Egypt
Accounting
&Finance
Chairman
Sales

HR
Alexandria and
Delta Regions
Manufacturing

Accounting
&Finance

Misr Bank (Functional structure )

 The bank keeps A functional organization is the most common type of organizational

structure. This is where the organization is divided into smaller groups based on its

special functions such as IT, finance or marketing. This departmentalization allows

greater operational efficiency because the employees have their skills and knowledge to

be shared within the group. The basis of this functional organization structure is an

arrangement where a worker has different managers for different areas of the

organization operation. Since this type of structure has many departments, it could also

have several reporting structures as well. Vertical and written communication is

excessive over horizontal communication with a centralized system of decision making

keeping control over costs using the economies of scale

 Because of people’s expertise, the workers with specialized skills can perform tasks

quickly, efficiently and with more confidence, while reducing of work-related mistakes.

The clear nature of the career path within the functional unit makes it possible for

employees to be highly motivated to advance their careers as they move up within the

hierarchy. This will keep them aiming for advancement and development.

 The major disadvantage is the lack of coordination between the different functions ,the

restricted view towards the organizational goals ,as well as the minimum ability to face

and respond to environmental changes

 The firm is mainly a vertical organization with high centralization ,a tall structure where

every supervisor is responsible for a a small number of subordinates

Mechanistic Vs Organic organization

 Given the 4 pervious examples we can conclude that FedEx keeps an organic structure
while Misr bank keeps a mechanistic structure due to the following factors

 FedEx keeps an organic structure with very limited centralization ,in others words the top
management allows empowering the rest of the organization to make decision and
participate in decision making ,the firm is dynamic with fast response to changes in
environment using collaborative teamwork instead of strict hierarchy of authority
(sticking to the chain of command ) , keeping a low level of formalization which is the
amount of documentation and paper work ,high level of informality is maintained ,and as
we explained before excessive horizontal communication instead of the written verbal
 communication .The firm is a learning organization focusing on innovation with a
flexible and adaptable cultural values

 Misr bank is a tradition organization machine like ,with very high level of centralization
with minimum opportunities given to the rest of the organization levels to participate in
decision making ,specialized tasks are few for each employee considering high
specialization ,the sticking to the formal chain of command very high in a s strict
hierarchy of authority m, keeping a rigid culture with no adaptation to environmental
changes, the primary concern is control over costs ,it is an efficiency organization ,and as
we explained before the vertical written communication is excessive ,the horizontal
communication is few across departments and functions .