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The divisionale organization, also as section organization or division organization designation, arranges organizational units on the second hierarchy level according to objects (products, customer groups, areas of distribution). These units are called divisions, sections or divisions, designated sometimes also as strategic departments (SGE, English SBU). This organization form is characterized a basic form of the primary organization and by the form of the a line system. The degree of the decentralization in a divisionalen organization can be differently pronounced:

  • central section organization (small degree at section autonomy; few, small and homogeneous sections; small complexity of the control instruments);
  • decentralized section organization (high degree at section autonomy; many, large and diversified sections; high complexity of the control instruments).

For the first time the divisionale organization under large attention was introduced in the twenties of DuPont and general of engine. Substantial meaning attained this form of the organization in the USA however only after the Second World War. In the course of the time this concept became generally accepted more with large enterprises ever and is nowadays far common.

Management

The allocation of the competencies for strategic and operational tasks is a fundamental characteristic of the section organization 1992). During strategic tasks (strategic management) of management to notice are, are the operational tasks (operational management) by the respective section (division) to be noticed. As tasks of management can be held:

  • Definition of long-term objectives and managerial policy
  • Steering and control of the divisions and central sites
  • Personnel occupation of the division lines
  • Distribution of resources
  • Definition of investment and main points of research

There are also here different forms of the organization, which are particularly for the strategic adjustment of the enterprise of importance. There is no in principle correct decision with the choice of the organization of management, this depends for example on the enterprise conditions.

  • In management the members are responsible as leaders for the central sites. The division leaders are not represented.
  • In management the members are responsible as directors/conductors of the divisions. The central sites are led by other leading employees of the enterprise.
  • Management is formed by the central site leaders and the division leaders.
  • The members of the management are only limited responsible for the central sites and the divisions.
  • The members of the management are not responsible for the central sites and the divisions.

Division

The divisions (sections) are functionally arranged. They can be led as Cost center, profit center or as Investment centers.

  • Cost center: Division line does not have influence on kind, quantity and price of the achievement which can be furnished. There are certain defaults, which must be fulfilled at as small an resources expenditure as possible.
  • Profit center: Division line bears cost and proceeds responsibility. Since by the enterprise strategy however nevertheless defaults are present, the deciding match area predominantly extends to the output and the selling price.
  • Investment center: Deciding match area is extended still by the Kapitaleinsatz. Here the division line can decide on investments and liquidations.

The profit center corresponds to the basic idea of the division organization earliest. In the Cost center is missing the necessary autonomy of the divisions, which is too strongly pronounced in the Investment center.

The partitioning of the divisions after products and/or product groups is the most frequently used. If the same manufacturing technology for different products is used, a production-technological partitioning offers itself. For partitioning after products alternatively or supplementing the regional-oriented formation of divisions steps in addition. At large-scale enterprises those are world-wide active, are particularly important this regional-oriented addition. Above all if these enterprises have a high foreign portion of the business.

Central site - Dienstleister of the divisions

The arrangement of the divisions overlaid by functionally arranged central sites. These central sites are formed due to size advantages, indivisible resources or tuning advantages. Substantial tasks of the central sites are the use of specialization advantages and size degression effects, the contribution of services for the divisions or fulfilment of general tasks of enterprise. Also they are to guarantee that the divisions act in the interest of the total company. Due to the MontanMitbestG and the MitbestG of 1976 many enterprises see themselves central site furnishing forced "„to personnel "“. These laws plan a central director of work, who is responsible for personnel questions for participation-requiring enterprises. Also within other ranges it is to be formed meaningfully central site. Often research and tasks of development require just like fiscal and legal affairs due to divisibility lacking of resources own central site.

The highest principle with the formation of central sites should always be for reasons of the preservation of the profit responsibility of the divisions the fact that nothing is centralized which for the success of the divisions is substantial.

Pro and cons

{| border=1

! Advantages! Disadvantages | - |
  • Discharge of highest management
  • High motivation
  • Increased flexibility and co-ordination
  • More accurate Erfolgsbeurteilung
  • Mark proximity of market orientation
  • Additional purchase sales of units more easily
  • faster decisions by short communication ways
|
  • Synergy losses
  • Section egoism
  • increased need of line places
  • higher coordination need and high administrative expenditure
  • potenzielle divergence between division and company targets
  • Loss in efficiencies by divisibility lacking of resources and suboptimale sizes of company
|}

If the divisions are to a large extent autonomous, management can concentrate on substantial strategic tasks, thus a discharge takes place. If the sections are market-referred formed, the market-focused co-ordination already takes place with the divisions, with which a larger market and customer proximity and more flexibility in relation to market changes are reached. The identification and the motivation of the coworkers with a visible section will be higher than with the larger total enterprise. It is possible to assign to each individual section a certain area of responsibility regarding costs and profit.

A disadvantage would be an inefficient resources use. Can be worked against to this however by the formation of central offices. Further it can come in the divisionalen organization fast to double-railednesses, which same work at the same time performed in several sections. Regarding the overall view a increased co-ordination expenditure is necessary for the retention of a homogeneous overall view. For some customers also a disadvantage can result, if the sections are strictly from each other separate and customers "“change"” within the enterprise fast between the sections want.

Summary

In summary one can say that the section organization offers itself with large enterprises, which face a complex and dynamic environment. With these enterprises the disadvantage in principle of the resources use affects itself rather small, whereby the product, market and customer orientation of great importance are.

Literature

  • R., economical organization teachings, 10. Aufl., Munich 2004
  • R., section organization, in: Frese, E., hand dictionary of the organization, Bd. 2, 3. Aufl., P. 2.274-2.287, Stuttgart 1992
  • Frese, E., bases of the organization, 8. Aufl., Wiesbaden 2000
  • Picot, A., Dietl, H., Franck, E., organization, 2. Aufl., Stuttgart 1999
  • Weinert, P., organization, Munich 2002

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