Dell has a functional organizational structure with some degree of decentralization. This means functional departments share information, contribute ideas to the success of the organization and have some degree of decision-making power.
Introduction
Dell is an American company that sells PCs, servers, data storage devices, software, peripherals, and consumer electronics from other brands, among other things.
Dell is perhaps best known for its direct-sales business model where consumers purchase made-to-order computers. However, parent company Dell Technologies has made several acquisitions in recent years to support the company’s new focus on analytics, cloud computing, and information security.
How is Dell structured?
Dell has a functional organizational structure with some degree of decentralization. This means functional departments contribute ideas to the wider success of the organization and have some level of autonomy in terms of decision-making.
However, the company is less decentralized than it has been in the past. In the 1990s, Dell’s information technology systems were highly fragmented. With most of the company’s applications developed independently across different departments, management lacked the necessary information to make even the most basic of decisions.
Dell realized that this way of doing business contradicted its organizational structure of centralized, functional groups reporting directly to headquarters in Austin, Texas. As the company entered the 2000s, it developed a system called Information to Run the Business (IRB). This system gives all Dell managers basic indicators such as financial performance, product margins, and product quality.
Today, these are managers of function-based groups such as:
Some of the members of this executive group are in charge of Dell Technologies companies that run independently. These include Virtustream, VMware, and Secureworks.
Dell also has two COOs beneath him in addition to Chief Officers for customers, marketing, services, human resources, global sales, operations, and finance.
Key takeaways:
Dell has a functional organizational structure with some degree of decentralization. This means functional departments share information, contribute ideas to the success of the organization and have some degree of decision-making power.
Function-based groups are considered in the context of three business markets, with each market supported by functions from some or all groups. The company is also structured according to three broad geographic regions and three within the Americas to improve sales efficiency.
Dell’s leadership structure changed somewhat after it acquired Dell Technologies in 2016. Michael Dell returned to the CEO position with a cohort of 14 executives who report directly to him.
In a functional organizational structure, groups and teams are organized based on function. Therefore, this organization follows a top-down structure, where most decision flows from top management to bottom. Thus, the bottom of the organization mostly follows the strategy detailed by the top of the organization.
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Harvard Business School professor Dr. John Kotter has been a thought-leader on organizational change, and he developed Kotter’s 8-step change model, which helps business managers deal with organizational change. Kotter created the 8-step model to drive organizational transformation.
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Airbnb follows a holacracy model, or a sort of flat organizational structure, where teams are organized for projects, to move quickly and iterate fast, thus keeping a lean and flexible approach. Airbnb also moved to a hybrid model where employees can work from anywhere and meet on a quarterly basis to plan ahead, and connect to each other.
eBay was until recently a multi-divisional (M-form) organization with semi-autonomous units grouped according to the services they provided. Today, eBay has a single division called Marketplace, which includes eBay and its international iterations.
IBM has an organizational structure characterized by product-based divisions, enabling its strategy to develop innovative and competitive products in multiple markets. IBM is also characterized by function-based segments that support product development and innovation for each product-based division, which include Global Markets, Integrated Supply Chain, Research, Development, and Intellectual Property.
Sony has a matrix organizational structure primarily based on function-based groups and product/business divisions. The structure also incorporates geographical divisions. In 2021, Sony announced the overhauling of its organizational structure, changing its name from Sony Corporation to Sony Group Corporation to better identify itself as the headquarters of the Sony group of companies skewing the company toward product divisions.
Facebook is characterized by a multi-faceted matrix organizational structure. The company utilizes a flat organizational structure in combination with corporate function-based teams and product-based or geographic divisions. The flat organization structure is organized around the leadership of Mark Zuckerberg, and the key executives around him. On the other hand, the function-based teams based on the main corporate functions (like HR, product management, investor relations, and so on).
Google (Alphabet) has a cross-functional (team-based) organizational structure known as a matrix structure with some degree of flatness. Over the years, as the company scaled and it became a tech giant, its organizational structure is morphing more into a centralized organization.
Tesla is characterized by a functional organizational structure with aspects of a hierarchical structure. Tesla does employ functional centers that cover all business activities, including finance, sales, marketing, technology, engineering, design, and the offices of the CEO and chairperson. Tesla’s headquarters in Austin, Texas, decide the strategic direction of the company, with international operations given little autonomy.
McDonald’s has a divisional organizational structure where each division – based on geographical location – is assigned operational responsibilities and strategic objectives. The main geographical divisions are the US, internationally operated markets, and international developmental licensed markets. And on the other hand, the hierarchical leadership structure is organized around regional and functional divisions.
Walmart has a hybrid hierarchical-functional organizational structure, otherwise referred to as a matrix structure that combines multiple approaches. On the one hand, Walmart follows a hierarchical structure, where the current CEO Doug McMillon is the only employee without a direct superior, and directives are sent from top-level management. On the other hand, the function-based structure of Walmart is used to categorize employees according to their particular skills and experience.
Microsoft has a product-type divisional organizational structure based on functions and engineering groups. As the company scaled over time it also became more hierarchical, however still keeping its hybrid approach between functions, engineering groups, and management.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
