Professional Documents
Culture Documents
ORGANIZATION STRUCTURES
ORGANIZATION STRUCTURES
Roles and Importance
ORGANIZATION STRUCTURES
Formal Structure
The official structure of the organization
Informal Structure
the unofficial relationships that develop
among an organizations members.
ORGANIZATION STRUCTURES
FormalStructures
Structure
system of tasks, reporting relationships, and communication that links
people and positions within an organization.
Organization Charts
describe the formal structure, how an organization should ideally work.
ORGANIZATION STRUCTURES
Informal Structures
Informal
Organization ,
Sports Group
Morning Coffee
regulars
Tall
Tall and
and Flat
Flat Organizations
Organizations
Tall structures have many levels of authority
and narrow spans of control.
As hierarchy levels increase, communication
gets difficult, creating delays in the time
being taken to implement decisions.
Communications can also become garbled as
it is repeated through the firm.
712
Flat
Flat Organizations
Organizations
Figure 7.8a
713
Tall
Tall Organizations
Organizations
Figure 7.8b
714
Work Specialization
Degree to which tasks are subdivided into individual jobs
A highly specialized job is narrow in scope
Increases efficiency up to a point
With extreme specialization, workers tend to become
bored and alienated
Chain of Command
The line of authority, shown in
the organization chart, that
links all persons and shows who
reports to whom.
CEO
VP Marketing
VP Production
VP Finance
Authority
Managers have authority because of the
positions they hold (not who they are)
To be effective, it must be accepted by
subordinates.
Responsibility
Duty to perform the task an employee
has been assigned
Authority should be commensurate with
responsibility.
Span of Management
Number of employees reporting
to a supervisor
Tradition has recommended a
span of management of four to
seven subordinates
What is best depends on the
situation
Basic Departmentation
EXHIBIT 11.4
Organizing process
122
/ Equipment
Time
Number
Departmentalization
Basis for grouping job positions into departments
and departments into the total organization.
Internal Operations Oriented
Functional
Network (Virtual)
Output Oriented
Divisional
Product
Geographic
Customer
Team (Cluster)
Combinations
Hybrid (different types at different places in
an org.)
Matrix (different types at simultaneous at
the same places in an org.)
http://www.bized.co.uk
Departmentation by Functional
Departmentalization
Grouping together people and jobs into one unit
Functional Structures
group together people using similar skills to perform similar activities.
Potential Advantages of Functional Structures
Economies of scale make efficient use of human resources.
Functional experts are good at solving technical problems.
Training within functions promotes skill development.
Career paths are available within each function.
Disadvantages
Difficult for departments to communicate with others.
Preoccupation with own department and losing sight of
organizational goals.
Functional Approach
Advantages:
Disadvantages:
Efficient use of
resources
Economies of
Scale
In-depth skill
specialization
Poor communication
among departments
Slow response to
external changes
Loyalty more to
function than
customer or the
whole organization
The
The
Function
Function
al
al
Structur
Structur
eeof
ofPier
Pier
11
Imports
Imports
Figure 7.3
Copyright 2004 McGraw-Hill. All rights reserved.
728
ORGANIZATION STRUCTURES
Functional Structures
Departmentation
Departmentation by
by Product
Product or
or
Services
Services
Product Structure
Customers are served by self-contained
divisions that handle a specific type of
product or service.
Allows functional managers to specialize in one
product area.
Division managers become experts in their area.
Removes need for direct supervision of division by
corporate managers.
Divisional management improves the use of
resources.
731
Viacoms
Viacoms
2001
2001
Product
Product
Structure
Structure
Figure 7.5
732
Product,
Product,
Market,
Market,
and
and
Geographi
Geographi
cc
Structures
Structures
Figure 7.4
Copyright 2004 McGraw-Hill. All rights reserved.
733
Departmentation
Departmentation by
by Territory
Territory
Geographic Structure
Each regional or a country or area with
customers with differing needs is served by a
local self-contained division producing
products that best meet those needs.
Global geographic structure
Different divisions serve each world region when
managers find different problems or demands across
the globe.
Generally, this structure is adopted when managers
are pursuing a multidomestic strategy.
734
Product,
Product,
Market,
Market,
and
and
Geographi
Geographi
cc
Structures
Structures
Figure 7.4
Copyright 2004 McGraw-Hill. All rights reserved.
735
Departmentation
Departmentation by
by Customer
Customer or
or
Market
Market
Market (Customer) Structure
Groups together people and jobs that serve
the same customers or clients
Global market (customer) structure
Customers in different regions buy similar products so
firms can locate manufacturing facilities and product
distribution networks where they decide is best.
Firms pursuing a global strategy will use this type of
structure.
736
Product,
Product,
Market,
Market,
and
and
Geographi
Geographi
cc
Structures
Structures
Figure 7.4
Copyright 2004 McGraw-Hill. All rights reserved.
737
Departmentation by Process or
Equipment
- Separated based on their role in a production process.
Best example of process departmentalization can be seen
in a textile mill where we may have a spinning department,
weaving department, dyeing department, printing
department, etc.
Cartridge
Printers
Color Fillers
Time departmentalization
In time departmentalization, departments are separated based on the
division of their working time or job shifts.
For an example, departments can be made based on night shift, morning or
regular shift, evening shift, etc.
Number departmentalization
In number departmentalization, separate departments are made after
analyzing and judging the maximum limit up to which number of persons can
be managed or educated or supervised or taken care of.
For example, students having numbers from 1 to 50 are made to sit in A
division of their class and so on. Military forces also use this method.
Departmentalization by numbers is depicted in the image given below.
number departmentalization.
Line Organization
Line and Staff Organization
Functional Organization
Project Organization
Matrix Organization
Committee Organization
Line organization
- Simplest and oldest type of Organization
- Also known as Military organization and was used first by Roman army.
- Lines of authority flows from top to bottom in more less straight line,
so it gives the name Line Organization
Line
Authority
----Staff
Authorit
Functional Organization
A functional organization structure is a
hierarchical type of organization structure
wherein people are grouped as per their area of
specialization. It allows decisions to be
decentralizedsince issues aredelegatedto
specialized persons or units, leaving them the
responsibility of implementing, evaluating, or
controlling the given procedures or goals.
F.W Taylor coined term Functional
Foremanship
to provide specialized skills at superior level.
F.W. Taylor recommended eight bosses i.e. route clerk, instruction card
clerk, time & cost clerk and disciplinarian for the office and
Gang boss, speed boss, inspector and repair boss for the factory.
Cons -
Conflict-Supervisory staff of equal rank may not always agree on certain issues.
Committee Organization
A committee is a group of people
who
meet to plan, to discuss or make a
decision for a particular subject.
Project Organization
Project Org.
Matrix Structures
Matrix Structure
uses permanent cross functional
teams to try to gain the advantages of
both the functional and divisional
approaches.
Matrix forms are hybrids
Some hybrids combine a mostly
functional structure with one or more important
products or markets, e.g., North America
Some hybrids combine a mostly divisional
structure with one or more important functions,
e.g., marketing
ORGANIZATION STRUCTURES
Matrix Structures
Team Structures
Team Structures
Product Team Structure
The members are permanently assigned to the team and empowered to bring a product to market.
Avoids problems of two-way communication and the conflicting demands of functional and product team bosses.
Cross-functional team is composed of a group of managers from different departments working together to perform
organizational tasks.
make extensive use of permanent and temporary teams, often cross functional, to improve
communication, cooperation, and problem solving.
Divisional
Organization
al Structure:
In this type of structure,
the organisation can
have different basis on
which departments are
formed. They are:
(i) Function,
(ii) Product,
(iii) Geographic
territory,
(iv) Project and
(iv) Combination
approach.
Product
Product Team
Team Structure
Structure
Figure 7.6b
762
ORGANIZATION STRUCTURES
Network Structures
Network structures maintain a staff of core
fulltime employees and use contracted
services and strategic alliances to accomplish
many business needs.
ORGANIZATION STRUCTURES
Virtual Structures
Virtual Structure
Uses information technologies to operate as a
shifting network of alliances.
MANAGEMENT TIPS
Seven deadly sins of outsourcing:
1. Outsourcing activities that are part of the core competency
2. Outsourcing to untrustworthy vendors
3. Agreeing to unfavorable contracts with the vendor
4. Overlooking impact on existing employees
5. Not maintaining oversight; losing control to vendors
6. Overlooking hidden costs of managing contracts
7. Failing to anticipate need to change vendors or cease outsourcing
Company division
Stars
Cash Cows
Question marks
Dogs
Question mark
Cash cow
Dog
High
Star
Low
High
Low
A contingency theory is an
organizational theory that claims
that there is no best way to
organize a corporation, to lead a
company, or to make decisions.
Instead, the optimal course of
action is contingent (dependent)
upon the internal and external
situation
Banks.
- Sheikh Nayeem
Dpt
Key Points :
Motivation: Gates uses stock options to attract and retain employees
Employees have become millionaires.
Staffing : Very Effective Human Resource ,Talents selecting Process
Selection of Right kind of employee
Flexible Working Hours
Stress Mgt : Exercise Rooms
Simple Structure with easy flow of Information among product teams.
For Development
of Win Operating
Eg. Hybrid / Team Organization Structure i.e Project Org
with effective cordination & flow of Communication
System
Gates
Finance Dpt
Mktg Dept
Case
Leo Harris, one of your assistants in a fire insurance company, is in charge of a
group of
clerical workers who review changed policies, calculate commissions, and
maintain records.
He is very hard working and everything coming out of his group is perfect. He
does not delegate authority and responsibility but rechecks in detail all the work
turned out by his group.
He keeps turning back to them careless and inaccurate work until it is perfect.
As a
result he is busy from early morning until late at night doing detail work and
neglecting his
role as supervisor. His workers have figured him out and are taking it easy. They
do slap-dash work and correct it as often as he returns it.
You are afraid that Harris is overworking and heading for a nervous breakdown.
You have
told him in general terms to delegate authority and responsibility and to
discipline his group.
He says that you just cant find people any more who have pride in their work or
concern for
the company and that if he fires any of his people or they quit the replacements
would
probably be worse.
1. What are some of the reasons why people do not delegate authority and
responsibility?
2. How should he go about delegating authority to them?
3. What are some of qualities that Harris lacks?
b. Team maker
Queries ?
Wednesday, March 9, 2016
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