Each has pros and cons. The former has breadth, centralized decision-making and control, fast delivery, and fast execution; the latter has depth, detailed division of labor, and high professionalism, but slow delivery of instructions, which affects execution speed. The former is suitable for small-scale companies in the early stages of entrepreneurship; the latter is more suitable for companies that have expanded in scale. But in the final analysis, content determines form, and form serves content. There is no better, only more suitable!

My company also discussed the issue of organizational structure at the end of last year. I want to share it with you, hoping it will inspire and help you. It's not a direct answer to your question.

1. Comparison of organizational structure models of enterprise groups

The organizational structures of enterprise groups include linear, functional, linear-functional, decentralized division type, compound division type, Matrix type and other forms. Now we mainly compare the U-shaped, H-shaped and M-shaped shapes that are suitable for enterprise groups.

⒈U-shaped structure: over-centralized organizational structure

The U-shaped structure is also called the "unitary structure", which was first proposed by Taylor. It divides management work into several functions according to functions. Each department has only a small degree of independence, and power is concentrated in the hands of the top decision-maker of the enterprise. Its basic framework can be summarized as Figure 1:

(General Manager)

(Production ) (Sales) (Finance) (Engineering) (Audit)…

Figure 1 U-shaped structure of enterprise organization

The advantages of this organizational structure are:

① Centralized leadership and unified command make it easy to allocate people, finances and materials;

② Clear responsibilities and high efficiency;

③ The work is orderly and the entire enterprise has a high level of stability.

The disadvantages of this organizational structure are:

① Clear hierarchy, each functional department is self-centered, and coordination is difficult;

② The initiative of lower-level departments , enthusiasm cannot be effectively exerted;

Although the U-shaped structure has many shortcomings, it is an effective organizational form. At present, this form is mostly adopted by Chinese enterprises.

In the early stages of vertical merger, each member company of the enterprise group generally adopts this structure.

⒉H-shaped structure: excessively decentralized organizational structure

The H-shaped structure, also known as the "holding company structure", is a decentralized organizational structure. Historically, H-shaped companies were formed by the horizontal merger of many small and medium-sized U-shaped companies.

The parent company holds part or all of the shares of the subsidiary, and each of its subsidiaries has independent legal personality. The industries they are engaged in are generally not closely related, thus forming a relatively independent interest center and investment center. The basic framework of the decentralized structure, which is in sharp contrast to the U-shaped centralized structure, can be summarized as Figure 2:

(Holding company headquarters)

(Functional departments) (Functional departments)

(Subsidiary) ... (Subsidiary)

Figure 2 H-shaped structure of enterprise organization

The advantages of this organizational structure are:

① Contains a U-shaped structure, and the subsidiaries that constitute the holding company often have a U-shaped structure;

② The subsidiaries maintain considerable independence and freedom, which is conducive to improving the enthusiasm of the subsidiary's operations ;

③It has positive significance in diversifying the business risks of enterprises.

The disadvantages of this structure are:

① It is difficult for the parent company’s strategies and policies to penetrate and implement into the subsidiaries;

② The functional departments of the parent company It does not directly serve subsidiaries, and it is difficult for subsidiaries to make full use of the parent company's staff;

③Each subsidiary must also establish shareholders' meetings, boards of directors and other institutions, which increases management costs;

Although the H-shaped structure has many shortcomings, it is also an effective transition form. Therefore, most enterprise groups in our country, especially those formed by horizontal alliances, mostly adopt this structure in the early stages of their formation.

⒊M-shaped structure: an organizational structure that combines centralization and decentralization

The M-shaped structure is also called a divisional structure or a multi-department structure. It is two types of U-shaped structures and H-shaped structures. further evolution of this structure. In this structure, each business unit or branch is usually a semi-autonomous center of interest, established by product, region, trademark, etc. Each branch usually has functional departments to coordinate and manage the production and operation activities of the branch. Although each branch is profit-centered, the calculation of its profits does not completely rely on the market, but can only be within the framework of the unified development strategy of the enterprise. To pursue self-development, its basic structure can be summarized as Figure 3:

(Company Headquarters)

(Functional departments such as strategic planning) (Functional departments such as financial accounting)

(Production) (Sales) (Finance) (Engineering)

Figure 3 M-shaped structure of enterprise organization

The advantages of this structure are:

①Although each branch is not an independent legal person, it is a relatively independent stakeholder and has greater autonomy in profit distribution and investment decisions. right. There are "quasi-market transactions" and "internal transfer transactions" between branches, which reflect the organic combination of the hierarchical system and the market mechanism;

② Senior leaders get rid of daily affairs and concentrate on using make decisions on major matters while maintaining regular operational contact with each division;

③There are both decentralized business units or divisions and a group responsible for coordination, supervision, and strategic decision-making company, thereby ensuring the necessary coordination and control. The shortcomings of this organizational structure are:

①Poor horizontal connections between business departments, which can easily lead to departmentalism and affect coordination among members;

②Between business departments Competition will lead to difficulties in personnel mobility and exchange of advanced management methods and production technology.

③The power structure becomes complicated, agencies overlap, middle managers expand, and management expenses increase.

Although the M-shaped structure also has many shortcomings, enterprise groups can give full play to the advantages of this organizational form and implement forward and backward integration, which may have previously affected suppliers and customers in the market. The internalization of transactions completed on the Internet places more and more business activities within a single enterprise, thereby expanding the scale of production lines and the scope of industrial organization. Therefore, this model is the preferred form for building large conglomerate companies.