- Describe any three organizational structures and their advantages and limitations. Illustrate with reference to an organization you are familiar with how restructuring help in the effectiveness of their organization. Briefly describe the organization you are referring to.
Solution:
PRINCIPLES OF ORGANIZATIONAL DESI GN
Division of Labour
Departmentalization
Specialization
Authority and Responsibility
Line and staff authority
Authority and power
Contingency Factors
Environment and technology
Knowledge technology: task variability & problem analyzability
Spans of Control
Levels of contro
Centralization and decentralization
Contingency Factors
Knowledge technology:
task variability & problem analyzability
Division of Labour
Departmentalization
Specialization
Authority and Responsibility
Line and staff authority
Authority and power
Contingency Factors
Environment and technology
Knowledge technology: task variability & problem analyzability
Spans of Control
Levels of contro
Centralization and decentralization
Contingency Factors
Knowledge technology:
task variability & problem analyzability
EFFECTIVE ORGANIZATIONAL DESIGNS
Use functional structures , when the organization is small, geographically centralized, and provides few goods and services.
---------------------------------------------------------------------
When the organization experiences bottlenecks in decision making and difficulties in coordination, it has outgrown its functional structure.
Use a divisional structure when the organization is relatively large, geographically dispersed, and/or produces wide range of goods/services.
Use lateral relations to offset coordination problems in functional and divisional structures.
------------------------------------------------------------------------------------------------------
When the organization needs constant coordination of its functional activities, then lateral relations do not provide sufficient integration. Consider the matrix structure.
To adopt the matrix structure effectively, the organization should modify many traditional management practices.
Use functional structures , when the organization is small, geographically centralized, and provides few goods and services.
---------------------------------------------------------------------
When the organization experiences bottlenecks in decision making and difficulties in coordination, it has outgrown its functional structure.
Use a divisional structure when the organization is relatively large, geographically dispersed, and/or produces wide range of goods/services.
Use lateral relations to offset coordination problems in functional and divisional structures.
------------------------------------------------------------------------------------------------------
When the organization needs constant coordination of its functional activities, then lateral relations do not provide sufficient integration. Consider the matrix structure.
To adopt the matrix structure effectively, the organization should modify many traditional management practices.
ORGANIZATION STRUCTURES
Functional Organizations
Reduces duplication of activities
Encourages technical expertise
-------------------------------------------------
DIVISIONAL ORGANZATIONS
Improves decision making
Fixes accountability for performance
Increases coordination of functions
---------------------------------------------------------
MATRIX STRUCTURES
Reinforces & broadens technical excellence
Facilitates efficient use of resources
Balances conflicting objectives of the organization
--------------------------------------------------------
LATERIAL RELATIONS
Dotted-line supervision
Liaison roles
Temporary task forces
Permanent teams
Integrating managers
=======================================
Organization Design
Organization design is central to an enterprise’s ability to be market driven, adaptive, innovative, and more – in short, to be able to compete effectively.
The design approach is guided by the following core principles:
Organization design is more than just structure – it is the integration of structure, processes, people, culture, systems and technology
Strategy is the starting point – organization design must be driven by, and supportive of, overall strategy
Clarity and accountability underpin sound organization design –when good people know what to do and are held accountable, they achieve results
Transitioning to a new organization end-state requires an integrated approach to change management
Functional Organizations
Reduces duplication of activities
Encourages technical expertise
-------------------------------------------------
DIVISIONAL ORGANZATIONS
Improves decision making
Fixes accountability for performance
Increases coordination of functions
---------------------------------------------------------
MATRIX STRUCTURES
Reinforces & broadens technical excellence
Facilitates efficient use of resources
Balances conflicting objectives of the organization
--------------------------------------------------------
LATERIAL RELATIONS
Dotted-line supervision
Liaison roles
Temporary task forces
Permanent teams
Integrating managers
=======================================
Organization Design
Organization design is central to an enterprise’s ability to be market driven, adaptive, innovative, and more – in short, to be able to compete effectively.
The design approach is guided by the following core principles:
Organization design is more than just structure – it is the integration of structure, processes, people, culture, systems and technology
Strategy is the starting point – organization design must be driven by, and supportive of, overall strategy
Clarity and accountability underpin sound organization design –when good people know what to do and are held accountable, they achieve results
Transitioning to a new organization end-state requires an integrated approach to change management
Strategic Organization Design
The Need:
Senior organizational leaders are constantly facing the need to restructure their organizations. Changes in leadership, a shift in strategy, or changing factors within an organization often create the need for reorganizing. Organization design is one of the most potent tools available to senior managers for shaping the direction of their organizations. It can be a key leverage point for directing attention and energy to certain critical activities in an organization.
Organizational leaders, however, often lack the tools necessary to help them in making decisions about how to structure their organizations. Efforts at restructuring are often uneven and unsystematic. Decisions to reorganize are often made with insufficient information and without a clear process to guide the effort. The result is that reorganizations often fail to produce the desired effects, leading instead to further confusion or problems within the organization.
The Process:
Strategic Organization Design is a four-phase participative process intended to provide senior leaders with a systematic, step-by-step method for examining the structure of their organizations. The four-phases are as follows:
p Preliminary Analysis
p Strategic Design
p Operational Design
p Implementation
The preliminary analysis involves the collection of information necessary for making design decisions. Structured interviews are conducted focusing on the strategy of the organization, the key tasks being performed and current strengths and weaknesses of the organization. Operational design involves the structuring of supervisory roles, information flows, and jobs within the context of the strategic design decisions. Implementation involves managing the transition from the current design to a new design.
The Need:
Senior organizational leaders are constantly facing the need to restructure their organizations. Changes in leadership, a shift in strategy, or changing factors within an organization often create the need for reorganizing. Organization design is one of the most potent tools available to senior managers for shaping the direction of their organizations. It can be a key leverage point for directing attention and energy to certain critical activities in an organization.
Organizational leaders, however, often lack the tools necessary to help them in making decisions about how to structure their organizations. Efforts at restructuring are often uneven and unsystematic. Decisions to reorganize are often made with insufficient information and without a clear process to guide the effort. The result is that reorganizations often fail to produce the desired effects, leading instead to further confusion or problems within the organization.
The Process:
Strategic Organization Design is a four-phase participative process intended to provide senior leaders with a systematic, step-by-step method for examining the structure of their organizations. The four-phases are as follows:
p Preliminary Analysis
p Strategic Design
p Operational Design
p Implementation
The preliminary analysis involves the collection of information necessary for making design decisions. Structured interviews are conducted focusing on the strategy of the organization, the key tasks being performed and current strengths and weaknesses of the organization. Operational design involves the structuring of supervisory roles, information flows, and jobs within the context of the strategic design decisions. Implementation involves managing the transition from the current design to a new design.
Strategic Organization Design
The key restructuring decisions are made during the strategic design phase. This phase involves six steps:
Step 1. Identify design criteria.
Step 2. Generate grouping alternatives.
Step 3. Evaluate grouping alternatives against the criteria.
Step 4. Generate linking mechanisms.
Step 5. Conduct an impact analysis.
Step 6. Select a new design.
The goal of the strategic design phase is to develop grouping and linking combinations that best support the strategy and basic work of the organization. Before any design decisions are made, the management group identifies design criteria - statements about what the new design will need to be able to do. These statements are reflections of the organization's strategy, its basic tasks, and the current strengths and weaknesses identified during the preliminary analysis.
Next, several different grouping alternatives are developed by the group and assessed against the design criteria. Linking or coordinating mechanisms such as liaison roles, integrator departments, etc. are then generated for each of the possible grouping alternatives. This step depends on the need for information exchange between groups in a particular design. Finally, an impact analysis is conducted to determine the effect that the new design will have on the organization. At this point a final design can be selected using the information and ideas generated during each step. Often the final design is a hybrid of several alternatives considered during the process.
Who Should Be Involved?
This process is highly participative, involving each member of senior leadership staff of an organization, i.e. a Vice President and each of his or her direct reports. The process draws heavily on the knowledge of the organization that each senior staff member has, and its success depends on the sharing of their ideas, concerns, and work-related needs. To complete the process usually requires one to two days time for each member of the senior staff.
The process is not only for those groups who have an immediate need to restructure. Leadership groups who only want to modify their organization slightly, or who simply want to reexamine their current structure may also benefit from using this process. The process can help managers to solidify their strategy and ensure that their structure is consistent with it.
Strategic Organization Design Process Outline
Objective: To provide a systematic participative process to help leaders structure their organizations in a way which helps accomplish the overall business strategy as well as the day-to-day work.
Phase I: Preliminary Analysis
Conduct structured interviews to:
v Identify strengths and weaknesses of the existing organization
v Clarify issues related to business strategy and organizational design
Phase II: Strategic Organization Design
v Design Criteria: Review information from the preliminary analysis and
generate criteria for a new design
v Grouping: Generate several design options and evaluate against criteria
- Grouping By Output – Product, Service, or Project
- Grouping By Activity – Function, Work Process, Knowledge or Skill
- Grouping By Customer – Market Segment, Customer Need, Or Geography
v Linking: Identify information flow requirements, select ways to
facilitate the flow of information to meet the requirements, and
evaluate against the criteria
v Impact Analysis: Analyze each option to determine feasibility given the
existing leadership skills, power relationships, and work environment.
Phase III: Operational Design
v Carry out the operational homework necessary to put organization design
decisions in place
v Design work charters, reporting relationships, information flows, etc.
Phase IV: Implementation
v Develop a strategy for implementing the new design
v Assess the potential resistance to the new organization
v Determine the best way to manage the transition from the old
organization to the new one.
==============================================
1.FUNCTIONAL ORGANIZATION.
This organization is structured by major functions.
-manufacturing function.
-production function.
-marketing function.
-sales management function.
-distribution functions.
-supply chain function.
-finance/accounting function
-legal function
-human resource function
etc
2.PRODUCT ORGANIZATION.
This organization is structured by product groups.
EXAMPLE LEVER BROS UK
-personal care products.
-food products.
-cosmetics
-peters ice cream
etc etc
===============================
Different types of organizational structure and their relevance
TYPES OF ORGANIZATION
HORIZONTAL ORGANIZATION
Horizontal organizations consist of teams which are organized around business processes and which are responsible for the results they generate. By flattening portions of the organization and holding the team members accountable for results, it asserts that decisions will be made more quickly and more consistently with business objectives. This tool seeks to reduce problems with cross-functional coordination by ensuring that the team members have the necessary skills to have end-to-end accountability for the process.
Approach
The following steps are critical to creating a horizontal organization:
Organize teams around the most critical business processes.
Give team members ownership of the process and assign a clear process leader.
Cross-train team members for the range of skills needed for their process.
Tie performance measures directly to customer requirements for the process, and reward individuals for individual and team contributions.
Create career development paths consistent with developing team consistent with developing team skills.
Redefine managers' roles to focus on enabling teams to perform through training, coaching, sharing, information, and setting strategic direction.
Benefits
Horizontal organizations are often used to structure processes which requires extensive cross-functional coordination. This tool increases the responsiveness and productivity of an organization. Additionally, horizontal organizations can be used to balance local and global needs within a multinational corporation by creating a network linking the disparate operations.
[these types of organization structure are still very popular with the
''brick and mortar '' type of manufacturing / marketing cos.
these organization are visible and can be seen in types like
-product divisions
-business divisions
-geographical divisions
-functional divisions
etc
The key restructuring decisions are made during the strategic design phase. This phase involves six steps:
Step 1. Identify design criteria.
Step 2. Generate grouping alternatives.
Step 3. Evaluate grouping alternatives against the criteria.
Step 4. Generate linking mechanisms.
Step 5. Conduct an impact analysis.
Step 6. Select a new design.
The goal of the strategic design phase is to develop grouping and linking combinations that best support the strategy and basic work of the organization. Before any design decisions are made, the management group identifies design criteria - statements about what the new design will need to be able to do. These statements are reflections of the organization's strategy, its basic tasks, and the current strengths and weaknesses identified during the preliminary analysis.
Next, several different grouping alternatives are developed by the group and assessed against the design criteria. Linking or coordinating mechanisms such as liaison roles, integrator departments, etc. are then generated for each of the possible grouping alternatives. This step depends on the need for information exchange between groups in a particular design. Finally, an impact analysis is conducted to determine the effect that the new design will have on the organization. At this point a final design can be selected using the information and ideas generated during each step. Often the final design is a hybrid of several alternatives considered during the process.
Who Should Be Involved?
This process is highly participative, involving each member of senior leadership staff of an organization, i.e. a Vice President and each of his or her direct reports. The process draws heavily on the knowledge of the organization that each senior staff member has, and its success depends on the sharing of their ideas, concerns, and work-related needs. To complete the process usually requires one to two days time for each member of the senior staff.
The process is not only for those groups who have an immediate need to restructure. Leadership groups who only want to modify their organization slightly, or who simply want to reexamine their current structure may also benefit from using this process. The process can help managers to solidify their strategy and ensure that their structure is consistent with it.
Strategic Organization Design Process Outline
Objective: To provide a systematic participative process to help leaders structure their organizations in a way which helps accomplish the overall business strategy as well as the day-to-day work.
Phase I: Preliminary Analysis
Conduct structured interviews to:
v Identify strengths and weaknesses of the existing organization
v Clarify issues related to business strategy and organizational design
Phase II: Strategic Organization Design
v Design Criteria: Review information from the preliminary analysis and
generate criteria for a new design
v Grouping: Generate several design options and evaluate against criteria
- Grouping By Output – Product, Service, or Project
- Grouping By Activity – Function, Work Process, Knowledge or Skill
- Grouping By Customer – Market Segment, Customer Need, Or Geography
v Linking: Identify information flow requirements, select ways to
facilitate the flow of information to meet the requirements, and
evaluate against the criteria
v Impact Analysis: Analyze each option to determine feasibility given the
existing leadership skills, power relationships, and work environment.
Phase III: Operational Design
v Carry out the operational homework necessary to put organization design
decisions in place
v Design work charters, reporting relationships, information flows, etc.
Phase IV: Implementation
v Develop a strategy for implementing the new design
v Assess the potential resistance to the new organization
v Determine the best way to manage the transition from the old
organization to the new one.
==============================================
1.FUNCTIONAL ORGANIZATION.
This organization is structured by major functions.
-manufacturing function.
-production function.
-marketing function.
-sales management function.
-distribution functions.
-supply chain function.
-finance/accounting function
-legal function
-human resource function
etc
2.PRODUCT ORGANIZATION.
This organization is structured by product groups.
EXAMPLE LEVER BROS UK
-personal care products.
-food products.
-cosmetics
-peters ice cream
etc etc
===============================
Different types of organizational structure and their relevance
TYPES OF ORGANIZATION
HORIZONTAL ORGANIZATION
Horizontal organizations consist of teams which are organized around business processes and which are responsible for the results they generate. By flattening portions of the organization and holding the team members accountable for results, it asserts that decisions will be made more quickly and more consistently with business objectives. This tool seeks to reduce problems with cross-functional coordination by ensuring that the team members have the necessary skills to have end-to-end accountability for the process.
Approach
The following steps are critical to creating a horizontal organization:
Organize teams around the most critical business processes.
Give team members ownership of the process and assign a clear process leader.
Cross-train team members for the range of skills needed for their process.
Tie performance measures directly to customer requirements for the process, and reward individuals for individual and team contributions.
Create career development paths consistent with developing team consistent with developing team skills.
Redefine managers' roles to focus on enabling teams to perform through training, coaching, sharing, information, and setting strategic direction.
Benefits
Horizontal organizations are often used to structure processes which requires extensive cross-functional coordination. This tool increases the responsiveness and productivity of an organization. Additionally, horizontal organizations can be used to balance local and global needs within a multinational corporation by creating a network linking the disparate operations.
[these types of organization structure are still very popular with the
''brick and mortar '' type of manufacturing / marketing cos.
these organization are visible and can be seen in types like
-product divisions
-business divisions
-geographical divisions
-functional divisions
etc
virtual organization
A virtual organization or company is one whose members are geographically apart, usually working by computer EMAIL and GROUPWARE while appearing to others to be a single, unified organization with a real physical location.
But there is more to virtual organizations then simply replacing the location where people work.
What makes a virtual organization different?
It removes many barriers - especially that of time and location.
It emphasizes concentrating on new services and products, especially those with intensive information and knowledge characteristics, rather than concentrating on cost savings made possible by removing the barriers.
It goes beyond outsourcing and strategic alliances and is more flexible in:
that it has continuously changing partners,
the arrangements are loose and goal oriented,
emphasizes the use of knowledge to create new products and services,
its processes can change quickly by agreement of the partners.
What are the steps to a virtual organization?
Often the steps here go through:
outsourcing mainly to reduce costs where there is some experience in working at a distance, but three is one dominant party and high certainty of what everyone must do.
forming strategic alliances to share the work and gain experience in developing and sharing common goals. Here there is no dominant party although the parties are fixed. and
then becoming virtual organizations to achieve flexibility. Now the partners themselves can quickly change, with greater emphasis on the use of knowledge to create new and innovative products.
Why virtual?
What are the reasons for organizations becoming virtual. These include:
Globalization, with growing trends to include global customers,
Ability to quickly pool expert resources,
Creation of communities of excellence,
Rapidly changing needs,
Increasingly specialized products and services,
Increasing required to use specialized knowledge
[these types of organization structure are becoming very popular with the
''SERVICE '' type of cos.
these organization are visible and can be seen in types like
-insurance
-financial
-consulting
-professional services
etc
A virtual organization or company is one whose members are geographically apart, usually working by computer EMAIL and GROUPWARE while appearing to others to be a single, unified organization with a real physical location.
But there is more to virtual organizations then simply replacing the location where people work.
What makes a virtual organization different?
It removes many barriers - especially that of time and location.
It emphasizes concentrating on new services and products, especially those with intensive information and knowledge characteristics, rather than concentrating on cost savings made possible by removing the barriers.
It goes beyond outsourcing and strategic alliances and is more flexible in:
that it has continuously changing partners,
the arrangements are loose and goal oriented,
emphasizes the use of knowledge to create new products and services,
its processes can change quickly by agreement of the partners.
What are the steps to a virtual organization?
Often the steps here go through:
outsourcing mainly to reduce costs where there is some experience in working at a distance, but three is one dominant party and high certainty of what everyone must do.
forming strategic alliances to share the work and gain experience in developing and sharing common goals. Here there is no dominant party although the parties are fixed. and
then becoming virtual organizations to achieve flexibility. Now the partners themselves can quickly change, with greater emphasis on the use of knowledge to create new and innovative products.
Why virtual?
What are the reasons for organizations becoming virtual. These include:
Globalization, with growing trends to include global customers,
Ability to quickly pool expert resources,
Creation of communities of excellence,
Rapidly changing needs,
Increasingly specialized products and services,
Increasing required to use specialized knowledge
[these types of organization structure are becoming very popular with the
''SERVICE '' type of cos.
these organization are visible and can be seen in types like
-insurance
-financial
-consulting
-professional services
etc
Boundaryless Organization:
What are the boundaries?
Vertical - Boundaries between layers within an organization
Classic Example: Military organization
Problem: Someone in a lower layer has a useful idea; "Chain of command" mentality
Horizontal - Boundaries which exist between organization functional units.
Each unit has a singular function.
Problem: Each unit maximize their own goals but not the overall goal of the organization
External - Barriers between the organization and the outside world (customers, suppliers, other government entities, special interest groups, communities).
Customers are the most capable of identifying major problems in the organization and are interested in solutions.
Problem: Lose sight of the customer needs and supplier requirements
Geographic - Barriers among organization units located in different countries
Problem: Isolation of innovative practices and ideas
What is a boundaryless organization?
One that makes all of these barriers much more permeable than they are now; loosen boundaries
Let information/ideas/resources/energy flow throughout the organization and into others.
Can an organization be completely boundaryless? No -- there will always have some hierarchy, functional divisions, geographic boundaries, limits between organization
BENEFITS
Quick Market Intelligence - direct customer feedback .
SPEEDY New Product Introduction.
RAPID Advanced Manufacturing Techniques.
Quality initiatives .
Quality focused CULTURE
OPERATION Benefits
Speed
Flexibility
Integration
Innovation
[these types of organization structure are with the
'' IT COS '' type of SOFTWARE/ SOLUTIONS cos.
these organization are visible and can be seen in types like
-IT
-ITES
-BPO SERVICES
etc
What are the boundaries?
Vertical - Boundaries between layers within an organization
Classic Example: Military organization
Problem: Someone in a lower layer has a useful idea; "Chain of command" mentality
Horizontal - Boundaries which exist between organization functional units.
Each unit has a singular function.
Problem: Each unit maximize their own goals but not the overall goal of the organization
External - Barriers between the organization and the outside world (customers, suppliers, other government entities, special interest groups, communities).
Customers are the most capable of identifying major problems in the organization and are interested in solutions.
Problem: Lose sight of the customer needs and supplier requirements
Geographic - Barriers among organization units located in different countries
Problem: Isolation of innovative practices and ideas
What is a boundaryless organization?
One that makes all of these barriers much more permeable than they are now; loosen boundaries
Let information/ideas/resources/energy flow throughout the organization and into others.
Can an organization be completely boundaryless? No -- there will always have some hierarchy, functional divisions, geographic boundaries, limits between organization
BENEFITS
Quick Market Intelligence - direct customer feedback .
SPEEDY New Product Introduction.
RAPID Advanced Manufacturing Techniques.
Quality initiatives .
Quality focused CULTURE
OPERATION Benefits
Speed
Flexibility
Integration
Innovation
[these types of organization structure are with the
'' IT COS '' type of SOFTWARE/ SOLUTIONS cos.
these organization are visible and can be seen in types like
-IT
-ITES
-BPO SERVICES
etc
Matrix structure
Different structures can be combined together. When one has two parallel
organizational structures this is called a matrix structure. The idea is to combine the
advantages of two structures, but this has the obvious disadvantage of being harder to
coordinate and introducing more potential conflict.
In the past most large companies were centralized – that is, involved structures in
which decisions were taken at the centre or upper levels of organization. Just as there
has been a move to flatter organizations, so there has been a move to decentralized
ones.
**MATRIX STRUCTURE
Reinforces & broadens technical excellence
Facilitates efficient use of resources
Balances conflicting objectives of the organization
Increases power conflicts
Increases confusion & stress for 2-boss employees
Impedes decision making
Different structures can be combined together. When one has two parallel
organizational structures this is called a matrix structure. The idea is to combine the
advantages of two structures, but this has the obvious disadvantage of being harder to
coordinate and introducing more potential conflict.
In the past most large companies were centralized – that is, involved structures in
which decisions were taken at the centre or upper levels of organization. Just as there
has been a move to flatter organizations, so there has been a move to decentralized
ones.
**MATRIX STRUCTURE
Reinforces & broadens technical excellence
Facilitates efficient use of resources
Balances conflicting objectives of the organization
Increases power conflicts
Increases confusion & stress for 2-boss employees
Impedes decision making
MECHANISTIC ORGANIZATION
mechanistic organizations are often appropriate in stable environments and for routine tasks and technologies. In some ways similar to bureaucratic structures, mechanistic organizations have clear, well-defined, centralized, vertical hierarchies of command, authority, and control. Efficiency and predictability are emphasized through specialization, standardization, and formalization. This results in rigidly defined jobs, technologies, and processes. The term mechanistic suggests that organizational structures, processes, and roles are like a machine in which each part of the organization does what it is designed to do, but little else.
The term "organic" suggests that, like living things, organizations change their structures, roles, and processes to respond and adapt to their environments. Organic structures are appropriate in unstable, turbulent, unpredictable environments and for non-routine tasks and technologies. For organizations coping with such uncertainty, finding appropriate, effective, and timely responses to environmental challenges is of critical importance. Organic organizations are characterized by:
decentralization
flexible, broadly defined jobs
interdependence among employees and units
multi-directional communication
employee initiative
relatively few and broadly defined rules, regulations, procedures, and processes
employee participation in problem solving and decision making, often interactively and in groups
mechanistic organizations are often appropriate in stable environments and for routine tasks and technologies. In some ways similar to bureaucratic structures, mechanistic organizations have clear, well-defined, centralized, vertical hierarchies of command, authority, and control. Efficiency and predictability are emphasized through specialization, standardization, and formalization. This results in rigidly defined jobs, technologies, and processes. The term mechanistic suggests that organizational structures, processes, and roles are like a machine in which each part of the organization does what it is designed to do, but little else.
The term "organic" suggests that, like living things, organizations change their structures, roles, and processes to respond and adapt to their environments. Organic structures are appropriate in unstable, turbulent, unpredictable environments and for non-routine tasks and technologies. For organizations coping with such uncertainty, finding appropriate, effective, and timely responses to environmental challenges is of critical importance. Organic organizations are characterized by:
decentralization
flexible, broadly defined jobs
interdependence among employees and units
multi-directional communication
employee initiative
relatively few and broadly defined rules, regulations, procedures, and processes
employee participation in problem solving and decision making, often interactively and in groups
he organization, I am familiar with is a
-a large manufacturer/ marketer of safety products
-the products are used as [personal protection safety] [ industrial safety]
-the products are distributed through the distributors as well as sold directly
-the products are sold to various industries like mining/fireservices/defence/
as well as to various manufacturing companies.
-the company employs about 235 people.
-the company has the following functional departments
*marketing
*manufacturing
*sales
*finance/ administration
*human resource
*customer service
*distribution
*warehousing/ transportation
*TQM
---------------------------------------------------------------
The above company ,initially, operated as a market structures company.
As the company added more technical products, it became necessary
to re-organize the company.
-we conducted customer survey.
-we conducted an in-house operation audit.
-we conducted HR audit.
BASED ON THE FINDINGS, WE REVIEWED THE FOLLOWING
Basic Characteristics of Organizational Structure
Division of labor: dividing up the many tasks of the organization into specialized jobs
Hierarchy of authority: Who manages whom.
Span of control: Who manages whom.
Line vs staff positions
Decentralization
Hierarchy of Authority
Tall vs flat hierarchies
Autonomy and control
Communication
Size
Span of Control
A wide span of control: a large number of employees reporting,
A narrow span of control: a small number employees reporting
The appropriate span of control depends on the experience, knowledge and skills of the employees and the nature of the task.
Line vs Staff Positions
Line vs Staff:
Line positions are those in which people are involved in producing the main goods or service or make decisions relating to the production of the main business.
Staff positions These are positions in which people make recommendations to others but are not directly involved in the production of the good or service
Decentralization
The extent to which decision making is concentrated in a few people or dispersed through out the organization
Advantage: benefits associated with greater participation and moving the decision closest towards implementation
Disadvantage: Lack of perspective and information, lack of consensus
Integration
Hierarchy of authority
Liaison roles
Teams, committees, task forces
VStandardization & formalization
Mechanistic & Organic Designs
Mechanistic: tallness in hierarchy, specialization, centralization in authority, formalization. Work best under stable conditions
Organic: flatness, generalization, decentralization flexibility Best fit dynamic conditions and complex technology
Effectiveness Criteria
Output approach
Internal process approach
Systems resource approach
Stakeholder approach
Effectiveness & Structure
Size and structure
Complexity
Differentiation
Decentralization
Formalization
Structure and satisfaction
Decentralization
Span of control
Backwards & Forwards
Summing up: we examined the characteristics of organizational structure, differentiation and coordination. Mechanistic and organic designs were discussed and organizational effectiveness.
==============================================================
BASED ON THE TOTAL FINDINGS, WE DECIDED ON A
-PRODUCT GROUP BASED '' MATRIX'' STRUCTURE. THIS STRUCTURE
GAVE THE COMPANY
-better / effective coordination with R&D.
-better / effective cooperation with SALES TEAM.
-BETTER CUSTOMER SERVICE ON TECHNICAL PRODUCTS.
-a large manufacturer/ marketer of safety products
-the products are used as [personal protection safety] [ industrial safety]
-the products are distributed through the distributors as well as sold directly
-the products are sold to various industries like mining/fireservices/defence/
as well as to various manufacturing companies.
-the company employs about 235 people.
-the company has the following functional departments
*marketing
*manufacturing
*sales
*finance/ administration
*human resource
*customer service
*distribution
*warehousing/ transportation
*TQM
---------------------------------------------------------------
The above company ,initially, operated as a market structures company.
As the company added more technical products, it became necessary
to re-organize the company.
-we conducted customer survey.
-we conducted an in-house operation audit.
-we conducted HR audit.
BASED ON THE FINDINGS, WE REVIEWED THE FOLLOWING
Basic Characteristics of Organizational Structure
Division of labor: dividing up the many tasks of the organization into specialized jobs
Hierarchy of authority: Who manages whom.
Span of control: Who manages whom.
Line vs staff positions
Decentralization
Hierarchy of Authority
Tall vs flat hierarchies
Autonomy and control
Communication
Size
Span of Control
A wide span of control: a large number of employees reporting,
A narrow span of control: a small number employees reporting
The appropriate span of control depends on the experience, knowledge and skills of the employees and the nature of the task.
Line vs Staff Positions
Line vs Staff:
Line positions are those in which people are involved in producing the main goods or service or make decisions relating to the production of the main business.
Staff positions These are positions in which people make recommendations to others but are not directly involved in the production of the good or service
Decentralization
The extent to which decision making is concentrated in a few people or dispersed through out the organization
Advantage: benefits associated with greater participation and moving the decision closest towards implementation
Disadvantage: Lack of perspective and information, lack of consensus
Integration
Hierarchy of authority
Liaison roles
Teams, committees, task forces
VStandardization & formalization
Mechanistic & Organic Designs
Mechanistic: tallness in hierarchy, specialization, centralization in authority, formalization. Work best under stable conditions
Organic: flatness, generalization, decentralization flexibility Best fit dynamic conditions and complex technology
Effectiveness Criteria
Output approach
Internal process approach
Systems resource approach
Stakeholder approach
Effectiveness & Structure
Size and structure
Complexity
Differentiation
Decentralization
Formalization
Structure and satisfaction
Decentralization
Span of control
Backwards & Forwards
Summing up: we examined the characteristics of organizational structure, differentiation and coordination. Mechanistic and organic designs were discussed and organizational effectiveness.
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BASED ON THE TOTAL FINDINGS, WE DECIDED ON A
-PRODUCT GROUP BASED '' MATRIX'' STRUCTURE. THIS STRUCTURE
GAVE THE COMPANY
-better / effective coordination with R&D.
-better / effective cooperation with SALES TEAM.
-BETTER CUSTOMER SERVICE ON TECHNICAL PRODUCTS.
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