Answer to Question #158241 in Management for Taja

Question #158241

The Malaysian government has proposed RM55 billion for the recovery and development of small-medium enterprises (SMEs). It is continued support for digitalization and automation transition through the Prihatin Rakyat Economic Stimulus Package (Prihatin), Prihatin SME+, National Economic Recovery Plan (Penjana), and the Prihatin Supplementary Initiative Package (Kita Prihatin). The initiatives were well-received by Malaysians. Considering you are starting a new company selling small electrical appliances, what organizational structure would you use? Provide THREE (3) reasons for selecting the organizational structure.

Expert's answer

I would use the divisional organization structure in setting up this new SME. Here, I will group my employees into teams based on product type, thus meeting different kinds of users. For instance, I might choose to structure my future workforce into wholesale and retail, assembly, customer relations, transportation, and warehousing departments. The following are the key reasons why I chose this structure. First, the structure will help in creating a hierarchy, which then increases the effectiveness as well as the efficiency of individual corporate operations. Second, the decentralized approach as tied to function means that employees are in areas that best meet their strengths. Third, it will allow me to sell a myriad of electrical appliances by function. This way, I can easily separate the products by roles for enhanced diversification. 

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