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What is a product structure? What are its advantages and disadvantages?

Question:

What is a product structure? What are its advantages and disadvantages?

Product:

A product is an object that is made available for consumers to use. It is a commodity put out in the market to satisfy the customer's needs and desires. It is made in a natural, manufacturing or chemical process. A product can be physical or virtual.

Answer and Explanation:

Product structure is a type of organizational structure that is formed following a particular product type. The system may have many layers of employees and managers. It is a framework under which separate divisions are created, and focus is shifted on a different service or product.

Advantages of product structure: -

-Product structure helps businesses to focus on particular market segments.

-Customer needs are met more efficiently.

-The firm responds to market changes in a fast manner.

-Companies can encourage healthy competition between all departments.

Disadvantages of product structure: -

-The functions and resources get duplicated.

-The product structure can result in harmful rivalries among members.

-Business loses centralized control over every division.

-The technical expertise gets scattered across smaller departments.


Learn more about this topic:

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What Is Organizational Structure of Management? - Types & Examples

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Chapter 9 / Lesson 32
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In this lesson, we will provide an overview of the different types of organizational structures a company can utilize. Read on to learn why having an organizational structure is important.


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