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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.