Multi/Integrated Channel Strategies and Organization Structures

INDUSTRY TRENDS:

• Flat organizations work better than hierarchical
• Less influence from central headquarters
• Integrated functions versus centralized functions
• Global companies are migrating to decentralized management
• The number of channels is driven by the type of products sold
• Management focus on market segments versus product groups assumes integration of data
• The role of sales managers (business unit heads) is changing to manage multi-channel (direct sales force, direct mail, Web, Telephone sales)
• Functional Corporate Structures (e.g. HR,IT, Accounting, Sales) have poor inter-unit coordination and create environments with restricted views of the organization
• Product Divisional Structures are difficult to integrate and coordinate across product/division lines
• Hybrid Combination Structures (combining product divisions and Headquarter functions) create environments with high administrative costs and high levels of conflict between divisional and corporate functions
• Matrix Structures (joint functional and products heads) create environments that require dual systems to support functions and product lines. They are difficult to manage and expensive to integrate.

TYPES OF ORGANIZATIONAL STRUCTURES:

• Pluralistic=Different channel for different product groupings or product categories
• Monolithic=Integrates the different channels via IT/Database Marketing, Minimizes conflict
  By creating focus on different functions

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