Organizations exist to achieve objectives and goals. Large organizations with diversified products create multiple divisions to handle these kinds of activities. The main advantage of divisional structure is the divisions can act with a great level of autonomy to address different situations, whereas the central part of the organization focuses on the big picture. Existence of multiple divisions mean there is duplication of activities with each division. Financial firms are known to have tight procedures as well as control systems.
Large organizations merge into single synergies, but also split out into separate divisions. The structure of an organization can make a big difference and hence, this kind of split or merger is needed. Some companies achieve success through strict systems, but others try to duplicate the structure and end up with terrible results. This is the reason why new companies have to evolve the structure as the company grows.
About the Model
Organizations that have figured out the best way to integrate the internal and external elements are considered to be successful. These companies understand the significance of redesigning their organizational structure from time to time on a regular basis. Henry Mintzberg identified different organizations as a result of their blend of strategy and organizational structure. According to Mintzberg's Organizational Configurations, the structure of organization emerges from the interplay of organizational strategy and the organizational structure. When the strategies and structures fit well, they are merged to create successfully performing organizations. The organization is likely to face severe problems, when the strategies and structure fail to fit well.