Optimum Organizational Structure for an Acne Medication Company

February 22, 2012 by  Filed under: Management 

The company referred to in this article is nonexistent and its name is mentioned purely for the purpose of illustrating how functional organizational structure works in an industrial production company.

This is an acne medication company and it produces and sells medication for acne. This company is brought into the context just to explain how functional organizational structure must be set up in a company. The success of a company depends on its organizational set up. What are included in the organization of a company are production, marketing and finance.

Let us start with the marketing aspect of a business. Since this is an acne medication company, it is important to make the general public know that the company produces and sells medication for acne. Advertisement does this job. There should also be some sales promotion strategies like free gifts and discounted prices. To sell the medication, the acne medication company can take the help of other established stores which sell items for teenagers. This is because teenagers are more susceptible to acne attacks and when they visit their favorite stores, they will notice the acne medication and they might buy it from the store.

These stores which sell acne medication and other items for teenagers must be given more focus in the advertisement. The advertisement should aim at attracting as many teenagers as possible to the stores where acne medication is sold.

Studying the market for acne medication is very important to learn what changes are to be made in the company’s production and sales strategies. There will surely be other companies too which sell acne medication. It is important to make a price and quality comparison among the medications sold by different companies. This will help the company to identify its shortfalls and make necessary changes in its production policy.

Another important part of the functional organizational structure of a company is its finance division. The finance division will be responsible for making payments for raw materials, preparing payroll and paying salary, paying the creditors on time and collecting debts owed to the company by its customers. The finance division should also keep an accurate record of all money transactions and prepare the cash flow statement. Some of these responsibilities can be handed over to outside agencies which will prepare the financial statements professionally. This will be more economical than employing the company’s own staff to prepare all the financial statements.

The third aspect of the functional organizational structure of the company is production. There are a number of activities that come under production. Procurement of raw materials, determining the production process, product design, quality control, packing and storing the finished products are some of them. Both under production and over production will affect the profitability of the company. To maximize profit, every company should try to minimize its cost of production. Proper management and strict control over the production process will go a long way in eliminating all wastes in the production process.

Steve Wilheir is a management consultant and C-level executive coach. If you like these tips on organizational structure, you might want to learn more about the functional organizational structure and the matrix organizational structure to see which more is more suitable for your organization.

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