- Process through which an organization's structure is changed from being organized in functional department
- Markets, clients, and locations serve as criteria for this

Divisionalization

- Added autonomy is preferred
- Decisions are made at regional manager's level 
- Decisions don't fall elsewhere
- Advantage for regional managers over other positions in both types of organizational archetypes

Decentralization: Divisional Organizational Archetypes

- Generally structured around outputs needed to complete tasks
- Usually applies to products 

University of Michigan - Ann Arbor

Organizational archetypes classify the structural frameworks of for-profit businesses into distinct categories, primarily functional, divisional, and matrix structures. The chosen archetype significantly affects a business's efficiency, daily operations, and long-term strategy. Additionally, businesses may employ a combination of these structural archetypes, resulting in a hybrid organization.

Organizational Archetypes in For-Profit Businesses

Hax, Arnoldo C., and Nicolas S. Majluf. Operations Research, vol. 29, no. 3, 1981, pp. 417–47. JSTOR, http://www.jstor.org/stable/170106. Accessed 18 Jul. 2022.
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Organizational Design: A Survey and an Approach

- Structured around inputs needed to complete tasks
- Usually involves specialties such as finance, marketing, production, engineering, research, and development
- Organizations usually transition from functional to divisional

Organizational Archetypes: Functional

Organizational Archetypes: Divisional

- Performance of an organization results strictly from human characteristics
- Relates to individual needs, motivations, perceptions, attitudes, values, leadership, communications, etc.
- Dependent more on relationships than output of work

Human Relations Theory: Businesses

- Regardless of the nature of organization, there universal principles every organization should follow
- Follow principles like equality of responsibility, unity of command, unit of direction
- Some managers still follow this, dependent on manager

Classical Theory: Businesses

- Individual behavior must be analyzed with a decision making framework
- Division of labor, communications, authority
- Shaping environment based on decision-making

Organizational Decision Making Theory: Businesses

- Environmental conditions of organization are the most influential
- Sometimes participate-based organization is better
- Sometimes formal is better
- Dependent on type of organization

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