Geographic Organizational Structure

Geographic Organizational Structure

Organizational structure defines the hierarchy in which an organization will operate. There are many defined types of organizational structure, but some organizations may create their own, or use a combination of several structures to efficiently run business operations. Geographic organizational structure is used for organizations that have offices or business units in different geographic locations.

Function

A geographic organizational structure defines a reporting and functional system across multiple locations. This type of structure allows an organization's offices to operate individually while adhering to company policies and values. Office locations can be local, national or international.

Direction

Each geographic location is overseen and directed by one or several executives. These executives oversee and direct the functions of the location and have responsibility for the entire operation and its finances.

Reporting Structure

Depending on the size of the organization, each geographic location may report to an executive who oversees several locations or it may report directly to top executives who are located at the main office of the organization. The reporting structure is based on the size of the organization and its industry.

Industries

Geographic organizational structure is used mainly in industries like retail and hotel chains, transportation and other large national and international organizations. Manufacturing organizations with several plants in different geographical locations may choose to operate using a geographic structure.

Geography

Geographic organizational structure allows for each business unit or office to operate as its own entity based on where it's located. Many organizations may experience more or less business opportunity in different places. This can increase or decrease financial budgets, revenues, the number of employees at the location and their salaries. An area's cost of living may also play a factor in the overall operations at each location.