Organisation Srtructure OB & HR

8/10/2019 Organisation Srtructure OB & HR

1/29

Understanding

Organisations


2/29

Organizational Design Defined

A plan for arranging and

coordinating the activities

of an organization for thepurpose of fulfilling its

mission and achieving its

goals.


3/29

Components of Organizational

Design


4/29

Organizational Structure

Defines the primary reporting relationships

that exist within an organization.

The chain of command and hierarchy of

responsibility, authority, and accountability are

established through organizational structure.


5/29

Common Forms of Organizational

Structure

Functional structure

Divisional structure

Matrix structure


6/29

Functional Structure

Members of the organization are groupedaccording to the particular function that they

perform within the organization. Appropriate when an organizations greatest

source of complexity comes from the diversetasks that must be performed rather than fromits products, geographic markets, or consumergroups.


7/29

Example of a Functional

Structure


8/29

Advantages

Facilitates specialization

Cohesive work groups

Improved operational

efficiency

Functional Structure: Advantages


9/29

Functional Structure: Disadvantages

Disadvantages

Focus on departmental vs.

organizational issues

Difficult to develop generalistsneeded for top-level

management

Only top-level management heldaccountable for profitability


10/29



Matrix structure


Structure


11/29

Types of Divisional Structure

Product divisional Most appropriate for organizations with relatively

diverse product lines that require specialized efforts toachieve high product quality.

Geographic divisional

Most appropriate for organizations with limitedproduct lines that either have wide geographiccoverage or desire to grow through geographicexpansion.

Customer divisional

Most appropriate for organizations that have separate

customer groups with very specific and distinct needs.


12/29


13/29

Product Divisional Structure


14/29

General Mgr.

Central

District

General Mgr.

Southern

District

General Mgr.

Western

District

General Mgr.

Northern

District

General Mgr.

Eastern

District

Chief Executive

District StaffPersonnelAccounting & Control

Corporate StaffFinance & AccountingPersonnelMarketingLegalPlanningResearch & Development

MarketingProductionEngineering

Geographic Organizational Structure


15/29

Departmentation by customers

Banks

MD

CommunityCity banking

Corporatebanking

Institutionalbanking

Real estate &Mortgage loans

Agriculturalbanking


16/29



Matrix structure


Structure


17/29

Matrix Structure

A structure in which the tasks of the

organization are grouped along two

organizational dimensions simultaneously.

Examples include:

Product/functionProduct/geographic region


18/29

Vice President,Production

Vice President,Engineering

Vice President,Purchasing

Vice President,Administration

Chief Executive Officer

ProjectManager

AEngineering

Staff

Production

Staff

Purchasing

Agent

Administration

Coordinator

Project

ManagerB

EngineeringStaff

ProductionStaff

PurchasingAgent

AdministrationCoordinator

ProjectManager

A

Engineering

Staff

Production

Staff

Purchasing

Agent

Administration

Coordinator

Matrix Organizational Structure


19/29

Matrix Structure: Advantages

Advantages

Can achieve simultaneous

objectives

Managers focus on two

organizational dimensions,

resulting in more specific job

skills


20/29

Matrix Structure: Disadvantages

Disadvantages

Complex, leading to

difficulties in implementation

Behavioral difficulties fromtwo bosses

Time consuming from a

planning/coordinationperspective


21/29

Managing Complexity Through

Integration

Interdependence is the degree to which workgroups are interrelated.

Three primary levels of work groupintegration:

Pooled interdependence

Sequential interdependence

Reciprocal interdependence


22/29

B

C

D

A

F

E

Occurs when organizational units have a

common resource but no interrelationship with

one another.

Pooled Interdependence

Head-

quarters


23/29

Sequential Interdependence

Occurs when organizational units must

coordinate the flow of information,

resources, and tasks from one unit toanother.

A B C


24/29

Occurs when

information, resources,

and tasks must be

passed back and forth

between work groups.

Reciprocal Interdependence

A

C

E F

D

B


25/29

Locus of Decision Making

Locus of decision making refers to the

degree to which decision making iscentralized versus decentralized.


26/29

Centralized Decision Making

Advantage

Gives top-level management maximum

control.

Disadvantage

Limits the organizations ability torespond quickly and effectively tochanges in the environment.


27/29

Decentralized Decision Making

Advantage

Organizations can respond to

environmental change more rapidly andeffectively because the decision makersare the people closest to the situation.

Disadvantage

Top-level managers lose some control.


28/29

Mechanistic Vs. Organic Systems

Mechanistic Systems

Highly centralized organizations in whichdecision-making authority rests with top-levelmanagement.

Organic Systems

Decentralized organizations that push decision

making to the lowest levels of the organizationin an effort to respond more effectively toenvironmental change.


29/29

What do you think would be the major form of

departmentation in the following organisations?

Why?

An international company operating in twenty-

five countries with a limited product line

An engineering-design organisation that designs

large projects, such as oil fields or airports.

A medium-sized manufacturing company with a

single major product.

A large consumerproducts organisation selling

throughout the India.

Documents

Organisation Srtructure OB & HR