Operational Structures in Business

Operational Structures in Business

Large organizations grow through subsidiaries, joint ventures, multiple divisions and departments along with mergers and acquisitions. Leaders of these organizations typically want to analyze the business based on operational structures such as industries, functions, consumers, or product lines.

Large organizations grow through subsidiaries, joint ventures, multiple divisions and departments along with mergers and acquisitions. Leaders of these organizations typically want to analyze the business based on operational structures such as industries, functions, consumers, or product lines. Additionally, leaders typically restructure their businesses to meet the requirements of the marketplace in an agile manner. A large organization requires an organizational structure that supports internal controls, effective performance measurement, and efficient delivery of goods and services. To accomplish this large organizations model multiple hierarchies to measure the effectiveness of restructuring, and to compare old and new organizational structures.

The various, multifaceted tasks and activities of an organization have to be divided into smaller, manageable components to facilitate efficient achievement of business objectives. Internally, an organization can be structured in many different ways, depending on their objectives. The internal structure of an organization will determine the modes in which it operates and performs. Organizational structure allows the expressed allocation of responsibilities for different functions and processes to different entities such as the branch, department, workgroup and individual.

Types of internal organizational structures:

Given below are the common differentiation ways:

  1. Horizontal or flat organizational structures
  2. Hierarchical organizational structures
  3. Functional organizational structures
  4. Divisional organizational structures (market-based, product-based, geographic)
  5. Matrix organizational structures
  6. Network organizational structures
  7. Team-based organizational structures

Related Links

Creation Date Thursday, 29 December 2022 Hits 1893

You May Also Like

  • Legal Structures in Businesses

    Legal Structures in Businesses

    Businesses not only vary in size and industry but also in their ownership. Most businesses evolve from being owned by just one person to a small group of people and eventually being managed by a large numbers of shareholders. Different ownership structures overlap with different legal forms that a business can take. A business’s legal and ownership structure determines many of its legal responsibilities.

  • General Ledger - Advanced Features

    General Ledger - Advanced Features

    Modern automated general ledger systems provide detailed and powerful support for financial reporting and budgeting and can report against multiple legal entities from the single system. These systems offer many advanced functionalities right from journal capture to advanced reporting. This article will provide an overview of some advanced features available in today's General Ledgers.

  • Shared Services Model

    Shared Services Model

    Shared Services is the centralization of service offering at one part of an organization or group sharing funding and resourcing. The providing department effectively becomes an internal service provider. The key is the idea of 'sharing' within an organization or group. 

  • Concept of Representative Office

    Concept of Representative Office

    A representative office is the easiest option for a company planning to start its operations in a foreign country. The company need not incorporate a separate legal entity nor trigger corporate income tax, as long as the activities are limited in nature.

  • Contra & Control Accounts

    Contra & Control Accounts

    There are five types of core accounts to capture any accounting transaction. Apart from these fundamental accounts, some other special-purpose accounts are used to ensure the integrity of financial transactions. Some examples of such accounts are clearing accounts, suspense accounts, contra accounts, and intercompany accounts. Understand the importance and usage of these accounts.

  • Concept of Legal Entity

    Concept of Legal Entity

    A legal entity is an artificial person having separate legal standing in the eyes of law. A Legal entity represents a legal company for which you prepare fiscal or tax reports. A legal entity is any company or organization that has legal rights and responsibilities, including tax filings.

  • GL - Errors & Reversals

    GL - Errors & Reversals

    Explore the concept of journal reversals and understand the business scenarios in which users may need to reverse the accounting entries that have been already entered into the system. Understand the common sources of errors resulting in the reversal of entries and learn how to correct them. Discuss the reversal of adjustment entries and the reversal functionalities in ERPs.

  • GL - Unearned / Deferred Revenue

    GL - Unearned / Deferred Revenue

    Unearned revenue is a liability to the entity until the revenue is earned. Learn the concept of unearned revenue, also known as deferred revenue. Gain an understanding of business scenarios in which organizations need to park their receipts as unearned. Look at some real-life examples and understand the accounting treatment for unearned revenue. Finally, look at how the concept is treated in the ERPs or automated systems.

  • Concept of Foreign Branches

    Concept of Foreign Branches

    As the business grows, the company may want to transition to a branch structure as branches are allowed to conduct a much broader range of activity than representative offices. Branches can buy and sell goods, sign contracts, build things, render services, and generally everything that a regular business can do.  A company expands its business by opening up its branch offices in various parts of the country as well as in other countries.

  • Matrix Organizational Structures

    Matrix Organizational Structures

    In recent times the two types of organization structures which have evolved are the matrix organization and the network organization. Rigid departmentalization is being complemented by the use of teams that cross over traditional departmental lines.

Explore Our Free Training Articles or
Sign Up to Start With Our eLearning Courses

Subscribe to Our Newsletter


© 2023 TechnoFunc, All Rights Reserved