Group 8 - Organizational Structure
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Transcript of Group 8 - Organizational Structure
ORGANIZATIONAL STRUCTURE
Presented by:Suhail Gaziani 75Darshana Shinde 112Shweta Matta 88Ritesh Gandhi 72
What is an Organizational Structure?
Organizational Structure is the system of task, reporting, and authority relationships within which the work of the organization is done.
Structure defines the form and function of the organization’s activities.
Structure also defines how the parts of an organization fit together.
Elements of Organizational Structure
Work specialization
Departmentalization
Chain of command
Span of control
Centralization and decentralization
Formalization
Work Specialization
It is the extent to which the organization’s work is separated into different jobs to be done by different people.
Advantages
Efficient use of labor
Reduced training costs
Increases productivity
Disadvantages
Repetitive jobs
Reduced job satisfaction
Decreases productivity
Departmentalization
Departmentalization refers to the process of grouping activities into departments.
Usually, the more specialized the jobs within the organization, the greater the departmentalization.
Basis of Departmentalization
Function Type of product Geography Type of customer Process
By Function
By Type of product
By Geography
By Type of customer
Loan Division
Retail Loan Commercial Loan Agricultural Loan
By Process
Chain of Command
It is an unbroken line of authority that
extends from the top of the organization
to the lowest level and clarifies who
reports to whom.
It answers questions for employees such as “To whom do I go if I have a problem?” “To whom am I responsible?”.
Span of Control
Span of control refers to the number of subordinates a manager can efficiently and effectively direct.
It is the number of people directly reporting to the next level
Centralization and Decentralization
Centralization - The degree to which decision making is concentrated at a single point in the organization.
Decentralization - The degree to which decision making is spread throughout the organization.
Formalization
It refers to the degree to which jobs within the organization are standardized.
It is the extent to which rules and procedures are followed in an organization.
TYPES OF ORGANIZATIONAL STRUCTURE
Types of
Organizational
Structure
FUNCTIONAL
SIMPLE
DIVISIONAL
MATRIX
SIMPLE STRUCTURE
Low departmentalization Wide spans of control Authority centralized in a single person Little formalization Commonly used by small businesses
Owner
Executive 1
Executive 2 Executive 3
PROS CONS
FAST
FLEXIBLE
INEXPENSIVE
CLEAR ACCOUNTABILITY
MORE SUITABLE FOR SMALL ORGANIZATIONS.
RELIANCE ON ONE PERSON IS RISKY
Functional Structure
Groups employees together based upon the functions of specific jobs within the organization.
CEO
R & D Production MarketingAccounting and Finance
PROS CONS
Simple to understand with clear lines of command
Specified tasks and responsibilities.
Staff can specialize in a particular business area
Interdepartmental conflict
Coherence and good communication are particularly hard to achieve between virtually independent functions.
Divisional Structure
Groups each organizational function into a division
Divisions can be categorized on geographical basis, market basis, or on product/service basis
Each division has relatively limited autonomy
Parent corporation acts as an external overseer to coordinate and control the divisions
PROS CONS
Encourage team spirit
Managers can develop broad skills as they have control of all basic functions
Risk of duplicating activities which can increase cost and reduces efficiency
Matrix Structure
Combines functional and divisional departmentalization
Dual lines of authority
PROS CONS
Better cooperation across functions
Improved decision making
Increased flexibility better customer service
Better performance accountability
Improved strategic management
Two-boss system is susceptible to power struggles
Team meetings in the matrix are time consuming
Requirements of adding team leaders can result in increased costs.
Emerging Organizational Structure
New organizing principles
1.Strong employee involvement
2. Authority based on capability
3. Teams
4.Mindfulness of environments, changes, patterns and themes
Network structure
It includes linking of numerous separate organizations to optimize their interaction in order to accomplish a common overall goal.
Egs-construction companies
Team organization
No supervisors in the company.
The team is granted sufficient authority and access to resources to produce their product
Team members develop their own process for identifying and rotating members in managerial roles
Fishnet organization
Flexible organization design
Form and reform varied pattern of connection
Learning organization
Managers do not direct as much as they facilitate workers.
For a learning organization ‘adaptive learning’ must be joined by ‘generative learning’.
The manager of this type of organization requires high value on communication and a great deal of patience.
Why Do Structures Differ?
Mechanistic Model
A structure characterized by extensive departmentalization, high formalization, a limited information network, and centralization.
Organic Model
A structure that is flat, uses cross-hierarchical and cross-functional teams, has low formalization, possesses a comprehensive information network, and relies on participative decision making.
Mechanistic Versus Organic Models
Why Do Structures Differ?
Organization Size
Strategy
Technology
Environment
Strategy
Innovation Strategy
Cost- Minimiza
tion
Imitation Strategy
Strategy – Structure Relationship
Innovation• Organic :
Loose Structure
Cost- Minimization• Mechanistic :
Tight Control
Imitation• Mechanistic
and Organic : Mix of loose with tight properties
Technology
Routine
• Routine technologies are associated with tall, departmentalized structures and formalization in organizations.
Non routine
• Customized Activities
Three- Dimensional Model Of Environment
Bharti Airtel
Tata Motors