Lecture Six

Organizational Structure

Fundamental of Organizing

Organizing is the process of establishing orderly uses for all resources within the management system.

Basic Types of Organizational Structure

The Simple structure The Functional Structure The Divisional Structure The Conglomerate Structure The Hybrid Structure The Matrix Structure The Team-Based Structure The Network Structure

The Functional Structure Grouping by similar work specialties

The Divisional Structure Grouping by similarity of purpose

The Conglomerate Structure

Grouping by industry

The Hybrid Structure Functional & Divisional Used within the

Same Organization

The Matrix Structure A Grid of Functional & Divisional for Two

Chains of Command

Types of The Matrix Structure

Weak/Functional Matrix

Balanced/Functional Matrix

Strong/Project Matrix

The Team-Based Structure Eliminating Functional Barriers to Solve

Problems

The Network Structure Connecting a Central Core to Outside Firms

by Computer Connections

Network Structure: MySQL Software maker 320 workers Located in 25

countries 70% of workers

work from home

Network Structure:H&M Not owning any

factories A network of 700

suppliers More than two-

thirds of them are in Asian countries

Group Discussion

Many people like the social interaction that comes with working in a physical office with other people. Others, however, welcome the opportunity to do task-oriented work in a home office. Which would you favor, why?

Factors in Creating the Best Structure

The Environment Size Technology Life Cycle

The Environment:Mechanistic vs. Organic Mechanistic Centralized

hierarchy of authority

Many rules and procedures

Specialized tasks Formalized

communication Few teams or tasks

forces Narrow span of

control, taller structure

Organic Decentralized

hierarchy of authority

Few rules and procedures

Shared tasks Informal

communication Many teams and

task forces Wider span of

control, flatter structure

The Environment:Differentiation vs. Integration

Differentiation: when forces push the organization apart Differentiation is the tendency of the

parts of an organization to disperse and fragment.

Integration: when forces pull the organization together Integration is the tendency of the parts

of an organization to draw together to achieve a common purpose.

Size

The larger the organization, the more mechanistic

Technology

Small-Batch Technology

Custom–Made Products Made by Organic Organization

Technology

Large-Batch Technology: Mass – Produced Products Made by Mechanized Organization.

Technology

Continuous-Process: Highly Routinized Products Made by Organic Organization

Life Cycle

Stage 1. The Birth Stage – Nonbureaucratic

Stage 2. The Youth Stage – Prebureaucratic

Stage 3. The Midlife Stage – Bureaucratic

Stage 4. The Maturity Stage – Very Bureaucratic