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Organisational Structures

This resource is designed specifically for Unit 2 of the Edexcel BTEC National qualification, 'Business and Management'.

Aim:

The aim of this resource is to enhance your understanding of the different organisational structures that businesses have. By the end, you should:

  • Be able to identify the range of organisational structures that a business may adopt
  • Understand the advantages and disadvantages of these different structures
  • Know that these structures often change over time as organisations grow and develop

Resources:

Activity:

Task 1

  • Use the Biz/ed Glossary(http://www.bized.co.uk/glossary/glossary.htm) to find definitions of the key terms outlined on slide 3 of the Presentation.
  • Look at the Hewlett-Packard 2002 Annual Report to research into the organisational structure of Hewlett Packard (HP) [PDF, 1.3 MB](http://www.hp.com/hpinfo/investor/financials/annual/2002/2002text.pdf). Note that this links to a large file that starts with a blank page. You need to scroll down the page to find the text!

In Palo Alto, California 1938, Bill Hewlett and Dave Packard begin work from their garage as developers of electronics products. Their start-up capital amounts to $538. In 2001, HP's turnover exceeded $45 billion and they employed nearly 90,000 people.

We have seen in the Presentation that HP have different views of their organisational structure:

  • The geographical view, which you may think is a reasonable way to organise a business such as this, which is truly global
  • The product or activity view that groups the company's activities into five broad segments

Task 2

  • Try to decide which of these organisational structures best suits the firm. See if you can find information from HP's own Web site that supports your decision. (http://www.hp.com)

The following is taken from Hewlett-Packard's annual report 2002:

'Our segments are based on our management organisational structure in 2002. Future changes to this organisational structure may result in changes to our reportable segments.'

Source: Adapted from the Hewlett-Packard 2002 Annual Report [PDF, 1.3 MB] (http://www.hp.com/hpinfo/investor/financials/annual/2002/2002text.pdf)


Task 3

  • What changes to the organisational structure could be made that would alter HP's business segments?
  • Which of the company's organisational functions would you think are the most vital to the future success of the business?