Organisations and management accounting
Organisations and management accounting

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Organisations and management accounting

3.2 Product or service structure

Described image
Figure 5 Product and service structures

At first glance this looks similar to the functional structure, but here staff members are grouped together on product or service lines. This very often happens in larger organisations. For example, a big accountancy firm may group staff by the industry served or a public education department may group staff around different areas of work (e.g., pre-school children, primary, secondary and special needs). Each product or service group will have its own production and service people and also its own accounting and personnel staff. A product or service structure can be more responsive to customer needs and better at motivating staff. However, there is a danger of creating independent units, which can be difficult to manage as they assume the attitude, ‘we know what the customer wants, so stop interfering!’. It can also mean that professional expertise becomes fragmented. For example, if each product line has its own small accounting team (perhaps just one person) this may reduce career opportunities for specialists.

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