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ACCA Strategic Professional · Strategic Business Leader · Enabling success: organising

Brightwave plc designs smartphone accessories. It keeps design and brand management in-house but outsources manufacturing to four Asian suppliers, logistics to a third-party provider and customer service to a call-centre firm, coordinating them through shared digital platforms and contracts. Which organisational form does this best describe, and what is a key risk?

This is a network structure, where a small core firm keeps design and brand and uses external partners for manufacturing, logistics and service. The key risk is dependence on partners, which reduces direct control over quality, delivery and confidentiality, rather than internal dual-reporting conflict.

  1. ANetwork structure; dependence on partners and weaker control over quality and deliveryCorrect
  2. BMatrix structure; confusion from dual reporting lines
  3. CFunctional structure; lack of coordination between departments
  4. DDivisional structure; duplication of resources across units

Explanation

Retaining a small core and relying on external partners linked by contracts and technology is a network (or virtual) structure. Its main weakness is reliance on partners, giving less direct control over quality, delivery and intellectual property. Matrix risks relate to internal dual reporting, which is not described.

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