Fundamentals of Organizational Structure. Organization Structure Three Components Three Components...
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Transcript of Fundamentals of Organizational Structure. Organization Structure Three Components Three Components...
Organization StructureOrganization Structure
Three ComponentsThree Components Formal reporting relationshipsFormal reporting relationships Grouping of people and departmentsGrouping of people and departments Design of systems to ensure effective Design of systems to ensure effective
communication, coordination, and communication, coordination, and integrationintegration
LinkagesLinkages
VerticalVertical ControlControl Centralized decision-makingCentralized decision-making How achieved:How achieved:
Hierarchical referralHierarchical referral Rules and plansRules and plans Vertical Information SystemsVertical Information Systems
LinkagesLinkages
HorizontalHorizontal LearningLearning Decentralized decision-making Decentralized decision-making How achieved:How achieved:
Information systemsInformation systems Direct contact Direct contact Task forcesTask forces IntegratorIntegrator TeamsTeams
Organizational StructureOrganizational Structure
Required Work ActivitiesRequired Work Activities Reporting RelationshipsReporting Relationships Departmental Grouping OptionsDepartmental Grouping Options
FunctionalFunctional DivisionalDivisional MultifocusedMultifocused HorizontalHorizontal ModularModular
Divisional StructureDivisional Structure
AKA Product StructureAKA Product Structure Decentralized decision-makingDecentralized decision-making StrengthsStrengths WeaknessesWeaknesses
Geographical StructureGeographical Structure
Designed according to where product Designed according to where product will be offeredwill be offered
Matrix StructureMatrix Structure
Combines functional and divisional Combines functional and divisional structurestructure
ConditionsConditions Need to share scarce resourcesNeed to share scarce resources Two critical outputs:Two critical outputs:
In-depth knowledge and new productsIn-depth knowledge and new products Complex and uncertain domainComplex and uncertain domain
Who’s in charge?Who’s in charge? StrengthsStrengths WeaknessesWeaknesses
Horizontal StructureHorizontal Structure
ReengineeringReengineering Faster and better service for Faster and better service for
customerscustomers Organized around processes and Organized around processes and
teamsteams StrengthsStrengths WeaknessesWeaknesses
Modular StructureModular Structure
Subcontracts processesSubcontracts processes Manages them from a central hubManages them from a central hub
Business focuses only on core Business focuses only on core competencycompetency
StrengthsStrengths WeaknessesWeaknesses
Hybrid StructureHybrid Structure
Centralized functional structure for Centralized functional structure for stable products; other products may stable products; other products may have self-contained departmentshave self-contained departments
Certain departments work through Certain departments work through entire organization (functional), but entire organization (functional), but processes are focused in other areas processes are focused in other areas (horizontal).(horizontal).
ApplicationsApplications
Have scarce resources and need Have scarce resources and need efficiency?efficiency?
Need inter-functional coordination, Need inter-functional coordination, innovation, and learning?innovation, and learning?