ACC 1 EXAM 1| LIBERTY UNIVERSITY

ACC 1 EXAM 1| LIBERTY UNIVERSITYAC 1.1 Evaluate the advantages and disadvantages of two organizational structures, including the reasons underpinning them. There are four types of organizational structures allowing companies to operate steadily. The four organizational structures include matrix, functional, divisional, and futarchy. Companies need to understand these types of organizational structures in how they are implemented, how they support organizations, their challenges, and their advantages to select the most appropriate structure aligning with the organization's goal. Selecting the proper structure by considering advantages and disadvantages allows the company to maximize competitive advantage, profitability, and increased market share. Functional Structure Functional structure is an organizational structure in which members are categorized into various departments based on their skill sets, specialization, accountabilities, and goals. Communication and decision-making are achieved through physical proximity and sharing tools and information. The organizational structure supports substantial employee specialization. An organization's biggest benefit from specialization is that employees only grow their skills and knowledge over time (Topchiy & Tokarskiy, 2018). The organizational structure also simplifies and improves the data management process. The structure helps organizations run their operations by grouping employees into different departments, making data collecting and reporting easy. The functional organization structure includes shortcomings that can limit the company's growth. The structure creates silos for data and communication. Communication within an information silo is always vertical, making it difficult for the information management system to work with unrelated systems (Topchiy & Tokarskiy, 2018). Lack of proper communication within the departments reduces operational efficiency and creates barriers to task completion. Another disadvantage of the organizational structure is that it reduces innovation. The formal hierarchies and rigidity of specific tasks limit employees’ collaboration and sharing of ideas. Reduced interactions and communication among members reduce innovation and invention. Hierarchical Organizational Structure Hierarchical organizational structure is also a common structure for most organizations. It entails different levels of authority with an established chain of command. The chain of command enables the connection among multiple levels within the organization, making it well- suitable for large organizations. It involves a tall organizational structure since its decision- making process is designed to flow from the top management to the lowest level (Saiti & Stefou, 2020). This organizational structure portrays a pyramid from the number of managers at each level. Such companies are led by a chief executive at the top, a senior management team, middle managers, and the workforce. With established global outreach to consumers, big companies such as Amazon utilize this structure. Its effectiveness for such companies has been attributed to its massive adoption as a viable organizational structure. The hierarchical organizational structure allows the company to attain and maintain a uniform standard. That ensures that the company’s authority regulates the changes in its regional markets by monitoring policies generated by the line managers. It also allows the autonomy of its regional markets, which have distinct demands. The line managers have an easier time under this organizational structure since it enhances well-defined roles