Organization Structure and Design

Organization Structure and Design

Business Fundamentals And Bangladesh StudiesCourse Co-ordinator : Mrs. Suraiya Nazneen

University of Chittagong

Evening MBA ProgramCenter for Business Studies

Faculty of Business AdministrationUniversity of Chittagong

Objectives

Describe what is meant by organizational structure and how it is revealed by an organization chart.

Explain the basic characteristics of organizational structure revealed in an organization chart.

Describe different approaches to departmentalization.

Explain how organizations can be designed with strategy in mind.

Find the consistency or discrepancy between theoretical and practical organization structure.

> The Nature of Organizing> Departmentalization> Establishing Reporting Relationships> Allocating Authority> Coordinating Activities> Basic Forms of Organizational Design> Current Issues in Organizational Design

Organization Structure and Design

For most participating managers, the term organization implies a formalized intentional structure of roles or positions.

Organization

1. Verifiable objective , which are major part of planning.2. A clear idea of the major duties or activities involved.3. An understood area of discretion or authority so that the person

pilling the role knows what he or she can do accomplish goals.

Organizational role

>> Enabling a group of people to combine coordinate and control resources and activities in order to produce value, all in a way appropriate to the environment in which the business completes

Organizational Design

Strategy

Structure

Processes

Rewards

People

Organizational Design

Input:

Customers requirements

Environmental demand and opportunities

Processing Elements:people, work

Informal organization...

Formal Organization(working balance/ harmony)

Output:

Products/services

Organizational Design

Principles of Organization Design

1. Division of Labor Departmentalization and Specialization2. Unity of Command Defining the line of command

One Superior 3. Authority and Responsibility line and staff authority

Authority and Power4. Spans of control levels of control

centralization and decentralization5. Contingency Factor Environment and technology

knowledge technology

Organizational Design

What's the departmentalization into the organization

Departmentalization

Departmentalization…

Vertical functional approach

CEO

Human Resource

Team HR

Manufacturing

Team MF

Accounting

Team ACC

Some structural design of departmentalization

Central HUB electronically connected to other organizations that perform vital function

Network

Network Approach

Central Hub

Establishing Reporting Relationship

• HRIS keeps track of this departmental organizational information through the reporting relationship fields.

•This data can be updated through the Establish/Maintain Position workflow to initially enter or maintain any changes in the organizational structure.

• Changes must be approved by the ECC team Assistants.

•The data maintained in HRIS for the reporting relationship will also export to another part.

• This action is processed in the Establish/Maintain position workflow.

Plant Manager

New Product developmen

t Team

Manufacturing Manager

Employee/ Subordina

tes

Sales Manager

Employee/ Subordina

tes

Human Resource Manager

Employee/ Subordina

tes

Diversity task Force

Team Assignments

Basic Example of a structure

Team Structure

Matrix Structure

Project Structure

Team Structure• BASED ON ONE OVERALL OBJECTIVE• GIVEN THE POWER TO BE AS INNOVATIVE AS THEY WANT• MAY HAVE A GROUP LEADER WHO IS IN CHARGE OF THE

GROUP

New forms of structure in organization

Matrix structure: The Matrix structure is an attempt to combine the Advantages of the pure functional structure and the product organization structure

Advantages of Matrix organizational form,to project management, include:

• Because key people can be shared, the project cost is minimized

• Conflicts are minimal, and those requiring hierarchical referrals are more easily resolved

• There is a better balance between time, cost and performance

• Authority and responsibility are shared

• stress is distributed among the team

New forms of structuring in organizations

Project Structure:

# Employees continuously work on projects

# This like Matrix Structure

# Each team has the necessary employees to successfully complete the project

# Each employee brings his or her specialized skill to the team.

The Current Issues in organizational Design:

Θ One of the most challenging things which companies face today is the working environment which is rapidly changing. The only way they can survive in this situation is adapting themselves with this changing environment.

Θ Today, organizations adapt to and influence a rapidly changing environment . Consider Google, provider of the Internet’s most popular search engine, which continues to adapt and evolve along with the evolving Internet.

Θ Organization have to cope with and accommodate today’s challenges of workforce diversity and growing concerns over ethics and social responsibility.

The structure and design of

HIRDARAMANI GROUP

Overview of HIRDARAMANI

↘ The HIRDARAMANI began their business in 1890, Parmanand Hirdaramani set up the first HIRDARAMANI retail store in FORT, Colombo, in Sri Lanka.

↘ The Lollytogs (UK based company) made a partnership with Hirdaramani in 1980 as expand of their business outside of Sri Lanka.

↘ The HIRDARAMANI Group has diversified in recent years to encompass the apparel, power, Information Technology, Finance Sector and Retail Industries, Stamping the respected Hirdaramani standard on each.

↘ Hirdaramani started their business in Bangladesh in apparel and IT sector at 1987, today they boost a rich and diverse heritage with over 30,000 employees in more than six industries.

↘ For meet the demand of more than 35 brand customers, Hirdaramani Produces 13 million garments each month.

↘ In 2011, Achieved turnover more than $ 1000 million.

Profit distribution structure

Profit

If Profit > 15%

No

5% for HIRDARAMANI

5 % for Lollytogs

Overhead cost and re-investment

Yes

5% for HIRDARAMANI

5 % for Lollytogs

Overhead cost and re-investment

For Employee (actual profit-

15%)

Director of country A

Director of country B

Director of country C

Director of country A

Director of country B

Director of country C

Director of UK

Director of Sri Lanka

Asst. Group CEO

Asst. Group CEO

Group Auditor head

Group CEO

Top management structure

CFO (All Power Sector)

CFO (Financial Organization

CFO (Electronic Sector)

CFO(Apparel Sector) CFO(Tourism)

Owners

Total Produce Quantity

Merchant

Sample dept.

IE dept.

Production unit

Merchan

t

Sample

dept.

IE dept

.

Productio

n unit

Team based structure

POLO

G-STARTOMMY

Merchant

Sample dept.

IE dept.

Production unit

Horizontal Matrix Structure

TOTAL QUANTITY

Tommy

Polo

G-star

I/E Team

U-3

U-4

U-5

Band

2-5/63

18-23/63

55-58/63

HR

U-3

U-4

U-5

Chief Financial Officer(CFO)

Director/CEO

Factory Manager

(swing Unit)

Shift Manager

Production Asst/

Supervisors

Factory Manager (Washing

Unit)

Maintenance In charge

Maintenance In charge

Maintenance Manager

Asst. Mgr. Quality

Quality In charge /

Fabric Inspection

Quality Team

Quality Manager

Asst. Mgr.

Planning

Planning Officer /

Coordination

Planning Manage

r

Asst. Manager

Coordinator

Sample Manger

Cutting Mngr.

Asst. Mngr.

Production Asst.

Factory Manager (Cutting

Unit)

Accounts Mngs. Merchandising

Sr. Merchandising

Asst. Or Tr. Merchandising

Sr. Merchandising

Manager

W/S Manger

Team Member

production manager

Production Asst. /

Supervisor

Finishing Manager

Asst. Mgr. Finishing

Finishing Team

Admin Sr. Executive /

Officer

Internal Security Officer

Compliance Executive /

Officer

Compliance & Admin Manager

HR Coordinator

Hr. Sr. Executive /Executive

Officer

HR Manager()

Group HR

Manager

IT Manager

IT Executive/

Officer

Store Manager

Store Executive

Store Office Asst

Finance Controller

Accountant

Accounts Sr. Executive

Accounts Executive /

Officer

Commercial Manager

Operator Manager

Export

Operator Executives/

Officers

Internal Auditor

Organization Structure of Apparel Sector

Limitation

× Personnel unfamiliar with procedures performed in their department by others.

× Inter-department documents of activities is often not accessible.

× Delays when there are problems.

× Decisions Making becomes slow.

× Accountability and performance are difficult to monitor.

× All higher rank are reserved for Srilankan.

× Limitation to take organization based decision

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