Organizational Structure Paper

Martin Villarreal

MGT230

November 7, 2012
Quinton Murphy

All Businesses must have an organizational structure in order to function efficiently and correctly. Whether the business is big or small, organization is one of the major keys to success. Organizational structures may come in all shapes and sizes. Best Buy Co. is a great example of a large business that has a solid organizational structure and it shows how being organized can take your small mom and pop type business and grow it into the retail giant it is today. When you first examine the organizational structure of Best Buy Co. it can be a bit confusing. Though the company is one big organization, it has many smaller sub organizations, for example Geek Squad and Best Buy Mobile. Though they are one company Geek Squad offers computer repairs as well as computer and home theater installations and trouble shoots, and Best Buy Mobile offers cell phones, while Best Buy as a store sells electronics. The Best Buy Co. organizational structure appears to be a hybrid of a functional and a divisional structure. The store is setup with different departments and each department has a lead or a supervisor that is in charge of meeting sales and financial goals. Above the department supervisors, there is a sales manager and then a general manager that is in charge of everything and everyone in that retail location. That is the part that is more of a functional structure. The divisional structure comes in the separate sub organizations. Best Buy Mobile, though it is in the same retail location most of the time, has its own separate budgets, and sales goals, its own payroll allocation and manager, making Best Buy Mobile a separate entity within the store (Best Buy Co. , 2011). With a functional structure, bottom level sales employees report to a department supervisor who then reports to someone higher up. The lines of authority are clearly known and each employee knows their role and is allowed to focus on his/her specific tasks. The different functions of production are divided into their specific departments and they do what needs to be done. The downside to a functional structure would be, if individual departments are too focused on one task, and only that task, they might not have to communicate with other departments, which can lead to headaches in the future if a task is assigned that needs participation from more than one department at a time. A divisional structure takes the different functions and spreads them among the different departments. For example if the business has several different departments making different products, each department would have its own marketing department, as well as sales department and accounting department. The benefits to a divisional structure are that with each product having its own team, the team can better focus on the product. Marketing can be broken down and made better and more efficient for each product, resulting in higher revenues. Also each department could be customized to more efficiently run; A small department may have a smaller team where a larger department could have a team that is two to three times bigger and built better to handle the different situations a bigger department might face. The downside to a divisional structure is many times if a company has four departments, it does not need four marketing teams. The company could hire one really good marketing team and that team could do the marketing for all four departments. A third functional structure would be the Matrix structure. A matrix structure can work in many ways like a functional structure where each employee has a set role but the difference is in a matrix, employees can be assigned to do projects with different managers and employees who may have different functions. The good thing about a matrix structure is that it allows the structure to adapt and make changes as the business feels they are necessary. The downside is once employees start getting shifted from department to department, the companies chain of command can become hazy or unclear. It may be harder to tell who is in-charge of whom and what is your specific function for the job you are assigned. Organizational functions can have an influence and they can develop the type of organizational structure your business uses. One example would be how Best Buy Co. does their marketing. The purpose of the business is to get customers in the store and sell them on electronics. Electronics are constantly changing and evolving, but not every type of electronic is suitable for every person. One customer could be looking for an electronic for entertainment purposes while another might be looking to find an electronic for business purposes. The type of marketing that is used to effectively reach the target audience must be adapted to fit the specific audience the business is trying to reach. Best Buy Co. must adapt its marketing strategies constantly and having a solid marketing team would be a smart move for a bright financial future. This can help shape the organizational structure because if marketing is one of the biggest departments in the business more money could be allocated towards that, rather than spending money on other investment that would not bring as much profit. If the marketing department is big enough, it may even be assigned its own organizational structure, with its own chain of command that is only specific to that department. Organizational design helps determine which structure best suits the organizations needs by showing the company where its flaws are and allowing the company to adapt and fix its’ deficits. For a big company like Best Buy it seems the best choice for an organizational structure would be a hybrid or matrix structure. The company is so huge and has so many departments, it may take a couple of different strategies and ideas to keep the company running efficiently and profitable. Also, an organizational structure that works in one area may not always be the best for another are. Companies must find organizational structures that are efficient financially but also productively.

References

Best Buy Co. . (2011). Best Buy Co. New hire orientation participant guide. Retrieved from
http://training.iambestbuy.com/resources/ParticipantGuide_NHO_FY11.pdf