Business Structure View - Divisional Structure

Business Structure view–Divisional Structure( check with prof. tom)

ING is organized around its market –Divisional Structure

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the business in ASIA/PACIFIC was organized into four country clusters, which shared service centers to achieve the lower costs. These four country clusters were governed by the reginal office in HK. The reginal CEO reported directly to the chairman of executive committee.

•        Under each clusters there are individual business units in countries. individual business units has a relatively high level of autonomy. Each unit develops its own strategies based on the local market situation. The individual business units varied greatly based on their internal organizational characterizes and operating styles.

•        Functional specialists are employed into each division.

•        Divisions are relative autonomous.

•        Divisions consist of products and services that are different from others’

•        Division executives determine product-market and financial objectives

Pros:

•        Consistent with localization strategy

•        Quick response to important changes in local external environment

•        Minimal problems of sharing resources across functional departments

Cons

1.        Lack of corporate-wide approach -- fragmentation of the organ

•        Business unit objective vs. regional strategy

•        Pay for performance: results were reported in local formats

•        Local marketing campaigns do not reflect existing corporate identity

•        Regular disconnection & communication problem

•        lack of coherence -- inefficiency, vulnerability

2.        Ambiguity in regional manager’s roles in operational structure

3.        Lack of consistent corporate brand image: Differences in image and quality may occur across divisions

4.        Can be a sense of a “zero-sum” game that discourages sharing ideas and resources among divisions