A divisional organizational structure refers to a business enterprise’s ability to segregate and consolidate large sections of its company into partially autonomous groups that are capable of self-management, little supervision and narrow focus on a particular aspect of a company’s product or service offerings. Divisional structures, like any other part of a business, has strengths, weaknesses and different types and functions. While divisions work well to bring more focus to a team or company aspect, one division’s actions many undermine that of another division and larger organizations can bring about compartmentalization, which can lead to inconsistencies and incompatibilities between divisions and the organization as a whole.
Two types of structures are international and regional divisional structures, both of which speak to the geographic and demographic location of a business and how its divisions operate. As companies expand internationally, reorganization and structure is crucial. For international strategies, it is important to have structure when crossing over into new markets where there are barriers to language, culture and the like.
Marketing organizations today must leverage global scale and also be as nimble as they are in their home countries (Arons et al., 2014). Regional divisional structures work for large companies that serve a varied customer base who have a ubiquitous need for its products and services. This decentralized type of operation works when a company has several geographic bases that are served with its operations. For example, Nike has a geographical divisional structure, despite being an international company. The company has created an organizational structure that revolves around dealing with market differences, creating a narrow focus on succeeding in those markets rather than having a universally global strategy. The world is as vast as it is diverse and marketing using a one-size-fits-all strategy would not serve a company with either an international or regional strategy.
Controls are necessary to ensure that the operations of an international company align with the goals and objectives. Formal and informal structures can be beneficial or detrimental depending on how well or how little they are understood and used. Formal structures and control methods includes strategies such as planning and budgeting, influencing marketing budgets and evaluating overall performance, each of which are quantifiable and measurable. The key to good organizing in global marketing is to remain flexible and willing to respond to differences in a new market which may greatly contrast with anything that the organization has come into contact with before. Informal structures develop around social and project groups which require lots of communication, most often face-to-face, and need a more immediate response and action when it comes to change. Companies rely on informal structures when formal structures are meant to be measured over time or when it has stopped being effective as a result of company growth and change.
An informal control for an international organization would be establishing frequent contact and a relationship between a company’s home headquarters in the domestic location and respective international or regional office, as well as training employees to understand the differences in goals between at home and in an entirely new place. Controls are necessary, yet implementing them is a complex task that requires both formal and informal controls. While formal controls are typically attributed to large organizations like corporations, both sets are useful to all types of businesses, no matter the size. The need to establish formal performance standards is just as important as maintaining contact and having meaningful discussions with employees, clients, stakeholders, etc. In an increasingly globalized world, it is crucial to understand how an organization targets and markets as the world radically transforms (Rooney, 2013).
Marketing organization means understanding how to move with the goals and objectives of the company and the changing world around it. Marketing organizations that do not have their own structure that works best for it will be left by the wayside, as Jennifer Rooney for Forbes states. The organizational structure that one chose used to look like several divisions of management and staff that were neither interrelated nor interconnected. The new organizational model positions groups within it working together with a few non-negotiables: a clear purpose, cross-platform use and work; complete alignment of functional areas and more. Despite what may appear to be a universal model with concepts that are crucial to working and operating in a 21st century world, organizational structures are not one-size-fits-all, nor should they be. There are several factors that influence organizational design decisions from company size to available technology to the overall corporate strategy. A small business will not have the same scope and resources to achieve organizational goals as a Fortune 500 company would, so the strategies for either company will likely differ greatly between the two.
The most common factors influence strategy, environment and networks as well; understanding these interrelated forces gives the company an idea of the direction it wants to and perhaps should go in. Organizations of different sizes need different structures depending on the types of interactions, technology and decision-making processes. A company’s technology aids in consolidation and workflow, which greatly differs among industries and departments that require different levels to function. The environment in which the organization operates in has a deep impact on its success, from legal to political to cultural circumstances. Organizational design also extends to include customers, clients allies and supporters and managing those networks can be done in a variety of ways, again, depending on the organization.
- Arons, M. D., Driest, F. V., & Weed, K. (2014). The Ultimate Marketing Machine. Harvard Business Review. Retrieved from https://hbr.org/2014/07/the-ultimate-marketing-machine.
- Badkar, M. (2014). GEORGE MAGNUS: These 5 Big Demographic Trends Are Shaping The World Right Now. Business Insider. Retrieved from http://www.businessinsider.com/5-demographic-trends-shaping-the-world-2014-4
- Rooney, J. (2013). Here’s What The Marketing Organization Of The Future Should Look Like. Forbes. Retrieved from https://www.forbes.com/sites/jenniferrooney/2013/10/04/heres-what-the-marketing-organization-of-the-future-should-look-like/#15f9680049da.