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Product, Functional and Geographical.
What is a functional approach
When your business is organised in your functions.
Advantages and disadvantages of the functional approach
+Departments can employ specialists.
+It’s clear who is responsible for what.
+Everyone knows their role.
-Coordinating activities may be more complex as more people are involved.
-Decisions take longer.
-Departments may have their own agenda.
Product approach
when the business organisation is split into products.
Advantages and disadvantages of the product approach
+It allows the business to focus on products.
+It creates competitiveness within the business
+Each product can be a separate profit centre.
-It creates wasteful duplication in some areas
- Too much focus on internal competition can lead to lack of focus on the action external competitors.
-A lack of central control.
Geographical approach
When you business organisation is sorted by country.
Advantages and disadvantages of the geographical approach.
+It allows products to be adapted to meet the need of different geographic markets.
+It encourages competitiveness within the business.
-It can cause conflict between the head office and area office.
-Creates wasteful duplication in some areas
-Focuses too much on external competition this can lead to the lack of focus on external competitors.
