Question 3 OR (b)

Team and network organisation structures: usefulness, merits and demerits

9 marks

Time to write: About 18 minutes
Topic: Organisational design and structures
Notes: Crux notes

Question

Question 3 OR (b) · 9 marks

Explain Team Organization Structure and Network Organization Structure. How are these organizations useful in the complex business environment of modern times? Also discuss their merits and demerits.

Reworded from the university paper; the task is the same. The original paper belongs to the University of Delhi. See DU's question bank.

Before you write

Read off the question and its marks

18 minfor 9 marks

Read from the question

Explain…How…?Discuss…3 questions in all: answer every one.

Write it in this order

Read; underline the asks; jot your points 1 min
1 Team structure explained with example 2 marks 4 min
2 Network structure explained with example 2 marks 4 min
3 Usefulness in the modern environment 2½ marks 4 min
4 Merits and demerits of each 2½ marks 4 min
Check: every ask answered, key terms underlined 1 min

1234

Short on time? Trim steps 1–4 evenly rather than skip one: each is capped at its own marks.

Try it first. About 18 minutes for 9 marks. Write it out, then open the solution.

Solution

Hover or tap a marked figure, like 72,000, to see how it is made and where else it appears.

Traditional structures (functional, divisional) are hierarchical and suited to stable conditions. Modern structures such as the team and network structures are flatter and more flexible.

Team organisation structure

In a team structure the organisation is built around teams rather than departments. Teams: often cross-functional and self-managed: are given responsibility for a complete task, product, customer or project. Members from different functions (design, production, marketing, finance) work together, share responsibility for results, make many of their own decisions and often choose their own leaders. The whole organisation may be made up of teams, or teams may be added to a traditional structure.

Example: a car maker organises new-model development around a platform team containing designers, engineers, purchase, production and marketing staff, who work together from concept to launch.

Network organisation structure

In a network (virtual) structure the organisation keeps inside a small core only what it does best, say design, brand and marketing, and buys the rest from other firms. Factories, transport companies and IT, accounting or call-centre providers work for it under contract, often in other cities or countries, and share its digital systems. The core's main managerial task becomes choosing those partners and keeping their work in step.

Example: a sportswear brand designs and markets its products itself, while independent factories manufacture them, logistics firms deliver them and an online marketplace handles sales.

Usefulness in the complex modern business environment

Speed and flexibility: teams and networks respond quickly to changing technology and customer needs.
Innovation: cross-functional teams combine diverse knowledge; networks give access to specialised partners.
Customer focus: teams can be built around customers or products.
Global reach: networks use partners worldwide.
Cost efficiency: fewer hierarchical levels; networks avoid heavy fixed investment.
Use of technology: digital tools make coordination across teams and partners possible.

Merits and demerits

	Team structure	Network structure
Merits	Breaks down departmental barriers; faster decisions; higher motivation and commitment; better use of diverse skills; fewer levels	Low fixed costs; focus on core competencies; access to the best partners worldwide; quick scaling up or down; flexibility to change partners; room for small specialist firms to take part as partners
Demerits	Time spent in meetings; conflicts within teams; unclear authority and accountability; need for training; some members may free-ride	Less control over quality and timing; dependence on partners, whose reliability cannot be taken for granted; risk to confidential knowledge; weak employee loyalty; coordination problems across distance and cultures

Conclusion

Team and network structures suit the fast-changing, knowledge-based and global environment of modern business. They work best when supported by trust, clear goals and agreements, good information systems and strong coordination. Many firms use them selectively, teams for innovation and projects, networks for non-core activities, while keeping a stable core.

Where the 9 marks sit

#	Component	Marks
1	Team structure explained (with example)	2
2	Network structure explained (with example)	2
3	Usefulness in the modern environment	2.5
4	Merits and demerits of each	2.5
	Total	9

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