Global matrix structureBy:Abhay AgarwalGaurav AroraHardeep PathakRohit Anand

Definition of Organization

Organizations are social arrangements for achieving controlled performance in pursuit of collective goals.

Organizational Dilemma

Organizational dilemma concerns the question of how to reconcile the potential inconsistency between individual needs and aspirations on the one hand, and the collective purpose of the organization on the other.

Nature of Organizing

 Identification and classification of activities Grouping activities Assignment of each group Provision for coordination in the organization

structure

Elements Of Organisation Line & staff Functional authority Hierarchy Span of control Organisational chart

Line Line employees are workers who are directly

responsible for manufacturing goods or providing a service.

Referred to as chain of command. A line structure deals with a company’s core task.

Staff Staff employees are workers who are in

advisory positions and who use specialized expertise to support the production efforts of line employees

Functional Authority A functional relationship exists where a staff

department has the authority to insist that the line manager implement its instructions concerning a particular issue.

Hierarchy Hierarchy refers

to the number of levels of authority to be found in an organization.

Span of Control Span of control is the number of subordinates

who report directly to a single manager/supervisor.

It depends upon the size of organization The span of control can be changed from time

to time depending upon the external environment.

A Sample Organization Chart

C h ie fA cco u nta n t

B u dg etA n a lyst

V ice P re sid e n tF in an ce

P la n tS u pe rin ten de nt

M a in te na n ceS u pe rin ten de nt

V ice P re sid e n tM a nu fa c tu ring

T ra in ingS p e c ia list

B e ne fitsA d m in is tra to r

D ire c to rH u m an R e so u rces

C E O

Organizational Chart Organizational chart is a pictorial record that

shows the formal relations that the company intends should prevail with it.

The chart shows the main departments & senior positions within the organization.

It is the usual way to examine the structure of an organization.

Structure - PurposeAn organization structure is designed to clarify: who is to do what tasks who is responsible for what results remove obstacles to performance caused by

confusion and uncertainty of assignment furnish decision making and communication

networks that reflect and support organization objectives

Organizational Structure

Structure is a means for attaining the objectives and goals of an organization – Peter Drucker (1974)

Organizational Design “In designing the organization, the leader should

focus on optimizing the response time to changes in the external environment.” (Stata, 1989)

“Competitiveness does not lie in downsizing it lies in design” (Dodds,1993)

Organizational Design-Change “ For managers, the dynamics of knowledge

impose one clear imperative: every organization has to build the management of change into its very structure.” (Drucker,1992)

Organizational Design: Structural perspective

People’s attitudes are shaped as much by the org in which they work as by their pre-existing personality variables.

Stresses the logical and rational elements of org and de-emphasises peoples preferences and feelings.

          

Organisational Design: Behavioural perspective Internal (individual) factors are main

determinants of human behaviour in org rather than external (structural) ones.

Behavioural scientists have found that there is an important relationship between a unit’s or individual’s assigned activities and the unit members’ pattern of thought and behaviour.

Organizational Choice Corporations, long have wrested with the problem of

how to structure organizations to enable employees, particularly the specialists, to do their jobs with maximum efficiency & productivity.

The perplexing issue is whether to organize around functions or products.

Types Of Organizations Functional Organization Divisional Organization Matrix Organization

Functional Organization Job specialization in the horizontal dimension

… is an inherent part of every organization, indeed every human activity.

Functional Org Structure

Chief Executive Officer or President

Manager Production

Manager Engineering

Manager Marketing

Manager R&D

Manager Personnel

Manager Accounting

Lower-level managers, specialists, and operating personnel

Functional Organisation(Merits) Logical reflection of functions Maintains power-prestige of functions Occupational specializationSimplifies training &

enables professional development Tight control

Functional Organization (Demerits) Over specialisation-narrow viewpoints Reduces coordination between functions De-emphasis of overall objectives Slow adaptation to environmental changes Conflicts over which products have priority

Divisional Organization This type of structure occurs when the

organization is arranged around the main products or services.

Specialization by location divides the organization geographically usually according to location of customers.

Divisional Org Structure

Chief Executive Officer or President

Corporate Staff

Division A

General Manager

Division B

General Manager

Division C

General Manager

Manager Production

Manager Engineering

Manager Marketing

Manager R&D

Manager Personnel

Manager Accounting

Organized similarly to Division 1

Organized similarly to Division 1

Lower-level managers, specialists, and operating personnel

Divisional Organization(Merits) Focused on product line & customer needs Growth & diversity of products Improves coordination & response to changes

in demand pattern Responsibility of profits at divisional level Training ground for general managers 

Divisional Organisation (Demerits)

Requires more persons with general management capabilities

Maintenance of central economical services difficult

Lesser control by top management May develop a product focus at expense of

wider company interests

Matrix Organization Combination of functional and product

structures. It attempts to capture the advantages of each of these approaches.

On one axis is a range of products or projects, with a manager responsible for each. On the other are the various functional groups.

Matrix Org Structure

Chief Executive Officer or President

Corporate Staff

Manager Administration

and Human Resources

Manager Projects

Manager Manufacturing

Manager Engineering

Manager Marketing

Manager Public Relations

Project A

Project B

Project C

Project D

Matrix Organisation(Merits) More than one critical orientation to the

company operations Oriented toward end results Pinpoints responsibility Specialised knowledge is widely shared but

developed within the functional group

Matrix Organization(Demerits) Conflict in organizational authority Problem of defining the extent of Project

Manager’s authority Functional groups may tend to neglect their

normal duties Results in a complex structure and difficult to

manage

Choice of structure Which provides the most efficient utilization of

machinery and equipment? Which provides the best hope of obtaining the

required control and coordination? Which approach permits the maximum use of

special technical knowledge?