A divisional structure categorises a company into separate units. Each unit focuses on a specific product line, market, or region (Gillikin, 2019). A key advantage is the ability to respond to changes in market demands. Divisions respond quickly to market changes or local customer needs without central approval. For example, Unilever’s move to product-based divisions to facilitate decision-making that fits consumer trends (Adams, 2022). These divisional units also build identity and accountability. They have their resources and goals, boosting motivation (Adams, 2022). Unilever chose this structure to manage diverse products or areas effectively. However, a major disadvantage is duplication and silos. Separate divisions have their support functions that increase costs. They might also compete against each other for resources or customers (Gillikin, 2019). For example, divisions in large firms create conflicting systems or duplicate work, like Microsoft’s past issues. The divisional model works best when the benefits of focus are greater than the inefficiency of fragmentation.
The matrix structure combines two organisational dimensions. Employees report to two managers: a functional manager and a project (or product) manager (Adams, 2022). The advantage is that Unilever adopts a matrix to gain flexibility and collaboration across specialists. Knowledge and staff are shared between projects or business lines. This sharing avoids the “silo” problem found in divisions (Elezaj, Morina and Kuqi, 2020). It improves information flow and innovation by engaging different skills. Unilever used a matrix (product and geography) to support global brands while staying locally responsive. Advantages include more efficient use of talent, as specialists work on multiple projects (Adams, 2022). It also improves coordination across the whole organisation. Companies needing to balance competing demands, like global consistency with local adaptation, choose this structure. However, the matrix structure has significant disadvantages. Dual reporting causes confusion and conflict for employees (Adams, 2022). Decision-making can slow down due to multiple approvals. Accountability can also become unclear. Unilever found its matrix added bureaucracy, leading to recent simplification. Matrix organisations also demand high levels of communication and trust from staff and leaders, which some companies struggle to maintain (Schnetler, Steyn and Staden, 2015).
References
Gillikin, J. (2019). Advantages & disadvantages of divisional organizational structure. [online] Chron. Available at: https://smallbusiness.chron.com/advantages-disadvantages-divisional-organizational-structure-611.html. Adams, P. (2022). Unilever realigns focus on product categories amid claims it’s lost its way. [online] Marketing Dive. Available at: https://www.marketingdive.com/news/unilever-realigns-focus-on-product-categories-amid-claims-its-lost-its-way/617654/ [Accessed 21 Jun. 2025]. Elezaj, E., Morina, D. and Kuqi, B. (2020). How organizational matrix structure can impact in project management success. 20th SGEM International Multidisciplinary Scientific GeoConference Proceedings 2020, Science and Technologies in Geology, Exploration and Mining, [online] 20(1.1), pp.131–138. DOI: https://doi.org/10.5593/sgem2020/1.1/s01.017. Schnetler, R., Steyn, H. and Staden, P.J.V. (2015). Characteristics of matrix structures, and their effects on project success. The South African Journal of Industrial Engineering, 26(1), p.11. DOI: https://doi.org/10.7166/26-1-1096.
