Product organizational structure advantages and disadvantages

Some of the advantages and disadvantages of a product organizational structure are as follows. Also, you can check out the advantages and disadvantages of the product organizational structure to know more about it.

Pros or Advantages of product organizational structure:

  1. Have particular product lines that are substantially different.
  2. This structure is market-oriented. In addition, it is flexible.
  3. It requires specialized expertise for production or distribution.
  4. Target a few major customers that make up most of your business.
  5. Different departments are a force to coordinate across all the functions.
  6. Friendly competition between departments can encourage hard work.
  7. It places responsibility for profit at the divisional level.
  8. An entrepreneurial spirit is fostered.
  9. It enecourges general management developement.
  10. Each product line or product group get concentrated attention.
  11. It facilitates the measurement of unit performance.
  12. Coordination of functional activities related to a product line is easy under the structure.

Cons or Disadvantages of product organizational structure:

  1. Losing central control over each separate division.
  2. Overemphasizing divisional, rather than organizational goals.
  3. Duplicating function and resources.
  4. There is less top management control.
  5. Dispersing technical expertise across smaller units.
  6. Nurturing negative rivalries among divisions.
  7. Complicate in the coordinate process.
  8. If there are too many divisions, coordination becomes complex and difficult.
  9. Hostile competition between departments can prevent the organization from achieving its strategic goal.
  10. The division may grow too large impairing managerial efficiency.
  11. It may give rise to conflicts between divisions.

Explore more information:

  1. Advantages and Disadvantages of Hierarchical Organizational Structure