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Product Vs. Function: What Is The Best Option For An Organization?

969 words - 4 pages

Companies continuously seek for the best organizational structure that will allow employees to be as effective and efficient as possible. The question many managers must ask themselves is whether to organize their departments by product or by function. Managers must decide between having specialist grouped together by function regardless of the product they work on or having them grouped by specific products and which option will be best suited for their organization (Walker & Lorsch, 1968, p. 1). Walker and Lorsch in their article “Organizational Choice: Product vs. Function” (1968) take an in-depth look at two companies, Plant F and Plant P, in order to examine these two structures in ...view middle of the document...

8). Walker and Lorsch (1968) found that managers in Plant F were happy with their job and company and found themselves more satisfied with their work (Walker & Lorsch, 1968, p. 9).
When examining Plant P, Walker and Lorsch (1968) determined that their goals were not only focused on their own but the company’s goals as a whole which allowed them to focus on long-term deadlines as well as the short-term. Due to the dynamics of the plant communication was essential and was often face-to-face in a more informal setting (Walker & Lorsch, 1968, p. 5-7). With communication being so open, when dealing with conflict managers were able to deal with them directly and in a timelier manner in comparison to Plant F (Walker & Lorsch, 1968, p. 7). In Plant P they were able to meet the second objective, as they were able to increase their production by 23% with in three years (Walker & Lorsch, 1968, p. 8). Although one down fall found in this organizational structure was that management did find themselves feeling stressed and pressured because of their involvement in the work done in the company (Walker & Lorsch, 1968, p. 9).
Compromise: Is that the answer?
Reviewing both plants, Walker and Lorsch (1968), determined that Plant F was stable and had a high rate of efficiency and Plant P was better at improving its capacity in the long run (p. 9). Walker and Lorsch (1968) state “…the functional organization seems to lead to better results in a situation where stable performance of a routine task is desired, while the product organization leads to better results in situations where the task is less predictable and requires innovative problem solving” (p.9). Determining which form of structure is best for ones organization is not a simple answer but one that must be examined and re-examined by management. A company can select to be organized by function and later decide that...

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