Product Organisation Structure:
Organization producing more than one product, structure their organisations that was based on product structures. Activities are separated on the basis of individual products, product line, services and are grouped within departments in product organisation structure. All significant functions, viz. marketing, finance and human production, resources are situated inside each department.
Table: Advantages and Disadvantages of a Product Organisation Structure
|
Advantages
|
1. This organisation structure is appropriate for those firms that generate multiple products.
2. Coordination between functional areas such as product design, production, marketing is effectual as all functions are in the similar department.
3. Responsibility and accountability for market sales, share, profit/loss could be clearly fixed.
|
|
Disadvantages
|
1. Every department will have production, marketing, finance managers, human resource, secretarial and supporting staff, computers and testing equipment. Since such specialised personal & equipment cannot be procured.
2. Inter departmental conflicts arise regarding sharing of general resources, allocation of general and overhead expenses etc.
|
Figure: Product Organisation Structure