Org Design

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1. Air asia Type of organizational design: Geographical departmentalization which involves grouping activities on the basis of geography or territory The advantage of this design is existence of Efficient Information Exchange One of the advantages of implementing the matrix organizational structure in a business is that it can lead to an efficient exchange of information. Departments work closely together and communicate with each other frequently to solve issues. Efficient lines of communication enhance productivity and allow for quick decision-making. For example, in a matrix structure, individuals from the marketing, finance and product departments may confer with one another to formulate strategies. The specialized information exchange allows managers to respond quickly to the needs of customers and the organization. The disadvantage would Internal Complexity. A disadvantage of the matrix structure is that it can result in internal complexity. Some employees may become confused as to who their direct supervisor is. For example, an employee may receive different directions concerning the same thing from supervisors in different departments. The dual authority and communication problems may cause division among employees and managers. Miscommunication and ineffective managing can result in employee dissatisfaction and low morale. Prolonged issues may cause an organization to experience high employee turnover. 2. Type of organizational design: Functional departmentalization which involves organizing departments around essential input activities, such as production, sales, and finance that are managerial or technological functions.

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Organizational Design

Transcript of Org Design

Page 1: Org Design

1. Air asiaType of organizational design: Geographical departmentalization which involves grouping activities on the basis of geography or territoryThe advantage of this design is existence of Efficient Information ExchangeOne of the advantages of implementing the matrix organizational structure in a business is that it can lead to an efficient exchange of information. Departments work closely together and communicate with each other frequently to solve issues. Efficient lines of communication enhance productivity and allow for quick decision-making. For example, in a matrix structure, individuals from the marketing, finance and product departments may confer with one another to formulate strategies. The specialized information exchange allows managers to respond quickly to the needs of customers and the organization. The disadvantage would Internal Complexity.A disadvantage of the matrix structure is that it can result in internal complexity. Some employees may become confused as to who their direct supervisor is. For example, an employee may receive different directions concerning the same thing from supervisors in different departments. The dual authority and communication problems may cause division among employees and managers. Miscommunication and ineffective managing can result in employee dissatisfaction and low morale. Prolonged issues may cause an organization to experience high employee turnover.

2. Type of organizational design: Functional departmentalization which involves organizing departments around essential input activities, such as production, sales, and finance that are managerial or technological functions.As with quick decision making, clustering people together according to professional similarities also fosters communication and knowledge sharing between co-workers. Instead of reliance on costly seminars and workshops, more experienced project team members serve as mentors to colleagues with less experience. Effective application of this knowledge results in a stronger, more productive project team.

The disadvantage of the mentioned design is Lack of Teamwork.While specialized units within the functional structure often perform with a high level of efficiency, they may have difficulty working well with other units. If a project calls for several units to work together, units may become territorial and unwilling to cooperate with each other. In essence, each unit may act in what it perceives to be its own best interests instead of those of the organization as a whole. Infighting may cause projects to fall behind schedule.

3. Type of organizational design: Product departmentalization which organizes employees based on which product line or set of services they work with. Each product line has a department of its own, and each department has specialists in all of the functions needed to produce and sell that product, such as marketing, manufacturing, accounting and human resources. The departments in this type of company operate autonomously from each other and are often better at responding to changing circumstances in a flexible way. For example, the salespeople can talk to the

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design and manufacturing specialists in their own department to address customer satisfaction issues rather than having to go outside the department. Smaller businesses would use this type of structure only if they offer distinctly different products or services. For instance, if your company provides both copywriting and printing, it might make sense to operate these services as separate and autonomous departments.The chief advantage of the divisional structure is that it focuses on results. Division managers have full responsibility for a product or service. The divisional structure also frees the headquarters staff from day-to-day operating details so that they can focus on long-term and strategic planning. The major disadvantage of the divisional structure is duplication of activities and resources. Each division, for instance, may have a marketing research department. Because of the duplication of functions, the organization’s costs increase and efficiency decreases..

4. Type of organizational design: Process Departmentalization which involves separation of the process into groups of smaller activities makes it easier to perform this process by personnel.The greatest advantage to this sort of departmentalization is that it allows for specialization. The people in the department are focused on one task and the managers can be expert in that task.

The greatest disadvantage of this type of departmentalization is that it isolates the department from the other parts of the process. The department may become excessively concerned with its own function instead of acting in ways that will benefit the overall production process and firm.

5. Type of organizational design: Process Departmentalization which involves separation of the process into groups of smaller activities makes it easier to perform this process by personnel.The advantage of this design is that it allows for specialization.  The people in the department are focused on one task and the managers can be expert in that task.Whereas disadvantage would be, it separates the department from the other parts of the process.  The department may become excessively concerned with its own function instead of acting in ways that will benefit the overall production process and firm.

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REFERENCES:

Robbins, Stephen P. and Coulter, Mary. Management. 7th Edition. Prentice Hall. Upper Saddle River, New Jersey

Ford, R. C., & Randolph, W. A. (1992). Cross-functional structures: A review and integration of matrix organization and project management. Journal of Management, 18, 267–294.

Anand, N., & Daft, R. L. (2007). What is the right organization design? Organizational Dynamics, 36(4), 329–344.

Ashkenas, R., Ulrich, D., Jick, T., & Kerr, S. (1995). The Boundaryless organization: Breaking the chains of organizational structure. San Francisco: Jossey-Bass.