Dell's functional structure


The larger the scale and scope of the solution, the larger the number of organizational units, and the larger the number of different kinds of organizational units that must coordinate their efforts to create the solution. That means there is a greater number of interfaces across which negotiations must take place. Structurally, the company will need strong customer-centric profit centers to pull together the products into effective solutions. It will need a greater amount of customer knowledge and a greater need for customer segment specific units. Company leadership will also need to centralize or take top-down initiatives on administering the processes that link the product units and the customer-centric units. These processes are explained in more detail in a later section.

In the time of evolution technology,Dell has reclaimed its name as one of the most known company of change. Change has helped Dell form its organization and its current structure of the business. The company is rapidly growing and continues to grow. their biggest problem that Dell is facing is competition. Dell aims to focus on pleasing its customers and to increase its services. But now Dell is mostly focusing on improving its communication in the organization itself. Their goal was not to concentrate to find short term solutions but rather to alter long term goals and objectives and to remain; Dell the most known, well respected and trusted technology partner in the technology industry.

Dell uses different combinations and acquisitions to expand their global reach and to increase their numbers of products that Dell offers but also to acquire previous outsourced parts of the their business model. By facilitating different factors such as: using the internet as a direct sales medium and also to use the internet as a tool to manage their procurement and JIT manufacturing, Dell can easily reach the global market.

The most important business drivers are the internet and technology, consumer demand for innovation of new products and global presence and growth. The key success factors for Dells business drivers are: direct marketing, supply chain management, build-to-order and low-cost-leader.

As many multinational companies Dell has been facing problems and has come up with some diagnosis to these problems. Unclear accountabilities, lack of understanding of consumer behavior, strategy changing structure that have not been changed for years and also its reactive state of change, had made Dell suffer and seek for solutions.

Dell now follows the functional structure with the great advantages of coordination, communication, skill improvement, motivation and controlling. The disadvantages to this structure that Dell has been facing are the limited growth under the existing structure, the limits to the number of products and the services and in to addition to that the coordination difficulties with its large size.

Dell's Functional Structure


Michael Dell







We are going to focus on the organizational structure how it is structured now and the advantages and disadvantages of different structures; matrix, front - back and geographic/market hybrid and give our recommendation based on the best alternative for Dell.

The advantages of the matrix structure are facilitator's transition, it balances the market and the local demands and finally it has a strong customer focus. But on the other hand the disadvantages are that the matrix structure is complex, costly, has a numerous reporting relationships, it would need multiple accountability - decision making and communications protocols and in the end the matrix structure would need more efforts in terms of efficient collaboration and coordination.

The advantages of the front/back structure are as follows: the front end is focused on specific customers and geography, it increases customer responsiveness and customisability, has a simplified reporting relationships, it offers inter-departmental communication fluid, it will benefit the products and the market structure, it will also have an opportunity for bundling products and finally Dell would have one face to its large customers. On the contrary the disadvantages on the front/back structure are rather few and involve conflict between front and back departments, lendency to duplicate marketing efforts and it has a large cost to set up. The processes that link the front and back units are important features of the front-back structure.

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