In the M-form organization M stands for Multi-divisional and it is called the divisional design. It is similar to the H-form design but has one notable distinction. Most of its businesses are in the same or related industries. For example, an organization with an M-form design might own one business that manufactures automobile batteries, other that manufactures lyre and still another that manufactures car polish. Although each is distinct from the other but still related, in terms of manufacturing products that is used by automobile owners. Thus, the M-form design is used to implement a corporate strategy of related diversification.
A primary advantage of the M-form organization is that it can achieve a great deal of synergy in its operations. For example, a consumer familiar with an organization’s batteries will be inclined to buy its tyres and car polish. Moreover, because the various units are in the same or related businesses, it is easy for top managers to understand, co-ordinate and control them. However, if the businesses are too closely related, ‘the organization cannot escape from the effect of cyclical fluctuations.
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