Organisaton Structure

8/14/2019 Organisaton Structure

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Organizing

Arranging the activities

of the enterprise in

such a way that they

systematically

contribute to the

enterprises goals.


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OrganizationStructure Organization structure

is designed to clarify

Who is to do what tasks

and Who is responsible

for what results

Structure is an

important tool that

orients managers and

subordinates to think

and act within a

specified framework.


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Organization Chart

Organization ChartA chart that shows the

structure of the organizationincluding the title of each

managers position and, bymeans of connecting lines,who is accountable to whomand who has authority foreach area.


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Departmentation and

Decentralization

Departmentation: The process through which anorganizations activities are grouped together andassigned to managers; the organization wide division ofwork.

Decentralization: The pushing down of decision-makingauthority to the lowest levels of an organization

Departmentation can be done based on:

Functional Product

Customer

Geographic

Process


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Functional Structure

An organizational form in which the major functions ofthe firm, such as production, marketing, R&D, and

accounting, are grouped internally.


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Functional Structure

Advantages

Enhanced coordination and control

Centralized decision making

More efficient use of managerial and technical talent

Facilitated career paths and development in

specialized areas

Disadvantages

Prevent communication and coordination due todifferences in values and orientations

May lead to short-term thinking (functions vs.

organization as a whole)

Difficult to establish uniform performance standards


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Matrix Organizations

Matrix OrganizationAn organization structure in which employees are

permanently attached to one department but also

simultaneously have ongoing assignments in which

they report to project, customer, product, or geographic

unit heads.


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Matrix Structure


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Matrix StructureAdvantages:

Better cooperation across functions

Improved decision making

Increased flexibility

Better customer service

Better performance accountability

Disadvantages:

Two-boss system is susceptible to power struggles

Team meetings in the matrix are time consuming

Teams may develop Groupitis Requirements of adding team leaders to a matrix structure can

result in increased costs

Groupitis- strong team loyalties that cause a loss of focus onlarger organizational goals


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Tall And Flat Organizations

Span Of Control

Span of Control

The number of subordinates reporting directly to a

supervisor.

Wide spans: larger number of direct reports. Narrow spans: fewer number of direct reports.

Tall vs. Flat Organizations

Tall organizations: more management layers and more

hierarchical controls. Flat organizations: fewer management layer and

decision making closer to the customer.


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Boundaryless OrganizationBoundaryless organization which describes an

organization whose design is not defined by, or limited

to, the boundaries imposed by a predefined structure.

1. Removes internal (horizontal) boundaries:

a. Eliminates the chain of command

b. Has limitless spans of controlc. Uses empowered teams rather than departments

2. Eliminates external (vertical) boundaries:

a. Uses virtual, network, and modular organizationalstructures to get closer to stakeholders.


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The Virtual Organization

An organization thatconsists of a small core of

full-time employees and

that temporarily hires

specialists to work onopportunities that arise.

A temporary network of

independent companiesthat use information

technology to share skills,

reduce costs, and provide

access to one anothers

markets.

Organisaton Structure

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