Organisational structures

In this lesson

1. 0:00 Organisational structures and management accounting
2. 1:02 Functional structure: benefits and limitations
3. 3:57 Divisional structure: scalability and control
4. 8:14 Network structure: outsourcing core activities
5. 14:18 Complex structures: joint ventures and alliances
6. 16:00 Managing performance in complex partnerships

About this lesson

You'll learn about functional structures, which group employees by department; divisional structures, which work well for larger or multi-product organisations; network structures, where companies outsource non-core activities; and complex arrangements like joint ventures and strategic alliances. Understanding these structures is essential for APM because each one creates different challenges for measuring performance, controlling costs, and making decisions that benefit the whole organisation rather than just one department or division. The lesson covers the key advantages and disadvantages of each structure. Functional structures are simple and cost-effective but can create silos where departments don't communicate well. Divisional structures scale easily for growth and acquisition but involve duplication of services. Network structures offer flexibility and focus on competitive advantage but depend heavily on strong relationships with external partners. Complex structures like joint ventures and strategic alliances require careful coordination, clear service level agreements, and shared information systems to work effectively. You'll also explore how performance management changes depending on structure. In functional organisations, you measure each manager only on costs they control directly. In divisional structures, divisional managers need visibility of overall strategy and consolidated reporting to the board. In network and complex structures, success depends on agreeing forecasts, standards, and actions with partners in advance—something you can't simply impose as you would in a traditional hierarchy. This lesson prepares you for exam questions asking you to discuss structural choices and their implications for control, measurement, and organisational effectiveness.

Duration: 20m