Geographic Organisation

Published by MBA Skool Team, Last Updated: September 16, 2016

What is Geographic Organisation?

Geographic organisation is an organisation structure where company hierarchy is divided on the basis of geographic location in which company operates which is headed by a centralised head office. This kind of organisational structure serves distinct needs of various different groups within and outside the country. Geographic organisation helps to understand local customer preferences which change according to geographic locations. Also, following geographical organisation structure can solve the logistic issues faced by the organisation as dedicated teams are allotted as per geographical divisions within the organisation.


Organisation structure is used for effective management of the organisation’s daily operations. Organisation structure creates hierarchy according to role of employees in the organisation and distributes responsibility and accountability for the role.


Advantages:

The advantages of geographical organisation is that local people according to geographic location having different specialisations can solve challenges faced by the organisation within the geographical region. Thus employees solely focus on their region and it leads to increase in profitability for the organisation. It will be easier for organisations to track profits within regions and can focus on them as each region has different profit margins, revenues and sales practices. Also the communication with customers is easier in geographic organisation due to local managers and regional focus on customers.


Disadvantages:


The disadvantages of geographical organisations are having increased efficiency within the regions but can create duplication of departments within the organisation as different marketing offices, manufacturing units and distribution networks according to region which will be difficult to manage. Also it is difficult to standardise the quality of employee as local talent is hired in geographical organisation. The example type of geographic organisation is Unilever etc. Thus when product offering is simple and customer needs are similar geography driven approach is preferred.

This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.

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