35044059-PPT-Organizational-Structure.ppt

8/10/2019 35044059-PPT-Organizational-Structure.ppt

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ORGANISATIONS


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Definition of Organization

Organizations are social arrangements

for achieving controlled performancein pursuit of collective goals.


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Organizational Dilemma

Organizationaldilemma concernsthe question of how

to reconcile thepotentialinconsistencybetween individualneeds and

aspirations on theone hand, and thecollective purposeof the organization

on the other.


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Nature of Organising

O Identification and classification of

activities

O Grouping activities

O Assignment of each group

O Provision for coordination in the

organization structure


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Elements Of Organisation

o Line & staff

o Functional authority

o Hierarchyo Span of control

o Organisational chart


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Line

Line employees are workers who aredirectly responsible for manufacturinggoods or providing a service.

Referred to as chain of command.Aline structure deals with a companyscore task.


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Functional Authority

A functional relationship exists where astaff department has the authority toinsist that the line managerimplement its instructions concerninga particular issue.


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Hierarchy

Hierarchyrefers to thenumber oflevels ofauthority tobe found in

anorganization.


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A Sample Organization Chart

Chief

Accountant

Budget

Analyst

Vice President

Finance

Plant

Superintendent

Maintenance

Superintendent

Vice President

Manufacturing

Training

Specialist

Benefits

Administrator

Director

Human Resources

CEO


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Organisational Chart

Organisational chart is a pictorialrecord that shows the formal relationsthat the company intends should

prevail with it. The chart shows the main

departments & senior positions withinthe organisation.

It is the usual way to examine thestructure of an organisation.


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Structure - Purpose

An organization structure is designed toclarify:

O who is to do what tasks

O who is responsible for what results

O remove obstacles to performance causedby confusion and uncertainty of assignment

O furnish decision making and communicationnetworks that reflect and supportorganization objectives


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Organisational Structure

Structure is a means forattaining the objectives and

goals of an organizationPeter Drucker (1974)


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Organisational Design

In designing the organization, the leadershould focus on optimizing the responsetime to changes in the external

environment.(Stata, 1989)

Competitiveness does not lie in downsizing

it lies in design (Dodds,1993)


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Organisational Design-Change

For managers, the dynamics ofknowledge impose one clearimperative: every organization has tobuild the management of change intoits very structure.(Drucker,1992)


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Organisational Design:Structural perspective

Peoples attitudes are shaped as much bythe org in which they work as by their pre-

existing personality variables. Stresses the logical and rational elements

of org and de-emphasises peoplespreferences and feelings.


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Organisational Design:Behavioural perspective

Internal (individual) factors are maindeterminants of human behaviour in orgrather than external (structural) ones.

Behavioural scientists have found thatthere is an important relationship betweena units or individuals assigned activitiesand the unit memberspattern of thought

and behaviour.


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Types Of Organisations

Functional Organisation

Divisional Organisation

Matrix Organisation


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Functional Organisation

Job specialisation in the horizontaldimension is an inherent part ofevery organisation, indeed everyhuman activity. Mintzberg, 1979


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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


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Functional Organisation(Merits)

Logical reflection of functions

Maintains power-prestige of functions

Occupational specialization Simplifies training & enables

professional development

Tight control


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Functional Organisation(Demerits)

Over specialisation-narrow viewpoints

Reduces coordination betweenfunctions

De-emphasis of overall objectives

Slow adaptation to environmentalchanges

Conflicts over which products havepriority


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Divisional Organisation

This type of structure occurs whenthe organisation is arranged aroundthe main products or services.

Specialisation by location divides theorganisation geographically usuallyaccording to location of customers.


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Divisional Org Structure

Chief Executive


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


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Divisional Organisation(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


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Divisional Organisation(Demerits)

Requires more persons with generalmanagement capabilities

Maintenance of central economicalservices difficult

Lesser control by top management

May develop a product focus atexpense of wider company interests


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Matrix Organisation

Combination of functional andproduct structures. It attempts tocapture the advantages of each of

these approaches.

On one axis is a range of products orprojects, with a manager responsible

for each. On the other are the variousfunctional groups.


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Matrix Org Structure

Chief Executive


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


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Matrix Organisation(Demerits)

Conflict in organizational authority

Problem of defining the extent ofProject Managers authority.

Functional groups may tend toneglect their normal duties.

Results in a complex structure anddifficult to manage


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Choice of structure

(1) Which provides the most efficient utilization ofmachinery and equipment?

(2) Which provides the best hope of obtaining the

required control and coordination?(3) Which approach permits the maximum use of

special technical knowledge?

Analysts usually fail to recognize the complex set oftrade-offs involved in these decisions.


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Decentralisation

Decentralisation implies more thandelegation: it reflects a philosophy oforganization and management. It requiresa careful selection of which decisions topush down into the organization structureand which to hold near the top

It is the tendency to disperse decision-making authority in an organization

structure. Tends to create a climate formore rapid growth and development ofpersonnel.


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Centralisation

Centralisation and decentralisation aretendencies.

Centralisation is the degree to which

authority is retained by higher-levelmanagers in an organization rather thanbeing delegated.

If a limited amount of authority is

delegated, the organization is usuallycharacterized as being centralized.

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