Business-Level Organizational Structure Strategies

Organizational structure can influence company culture.
Organizational structure can influence company culture. (Image: Ryan McVay/Photodisc/Getty Images)

Large companies often engage in more than one line of business at once. An automobile manufacturer, for example, may engage in both manufacturing and consumer financing activities. In these cases, strategies designed to govern a single line of business are referred to as business-level strategies. Several business-level strategies related to organizational structure can either maximize the efficiency of workgroups devoted to individual lines of business or minimize the cost of maintaining multiple lines of business within a single organization.

Integrated Functional Structure

The most basic and straightforward business-level structure strategy is to employ a functional, or divisional, organizational structure integrating all business units. In this type of structure, employees are grouped together based on the functions they perform -- such as accounting, marketing and legal compliance -- while working on issues from all different lines of business at once. An integrated structure can be ideal for companies with very similar lines of business, such as those who sell both fresh produce and boxed food. Marketing, accounting and product development for these two business units are so similar that it can make save money to assign the same employees to oversee both units.

Separated Functional Structure

If your various business units are not closely related, a business-unit functional structure may suit your needs. In this structure, employees are grouped by their functions, with a separate functional group for each business unit. The auto manufacturer mentioned above, for example, may choose to locate an accounting department for the sales division in one office and locate an accounting department for the finance division in another. This structure can be more costly than an integrated structure, but it allows each department to focus on a single core competency, increasing efficiency for each business unit. Separated functional strategies can be ideal for holding companies that own multiple unrelated subsidiaries.

Business-Level Product Structure

A product structure brings together interdisciplinary teams with representatives from each departmental function to manage individual products and services. In this structure, representatives from accounting, legal compliance, marketing, human resources and logistics may all be located on the same floor, working on the same product, while an identical team is located on another floor, working on a different product. This structure can be ideal for small businesses with few employees, allowing individuals to form tight-knit teams wherein each member is fully responsible for duties in his area of expertise.

Geographic Structure

Geographic structures group employees based on their geographic locations. Geographic structures can employ any of the organizational structure strategies mentioned above. A multinational company may decide to group different departments in different countries, for example, or to outline a product structure on multiple continents.

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