ppt on org. structure
Post on 18-Feb-2017
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Foundations of Organization Structure
Group of People have to Present
Roll No Name 01 Ajit P. Paudel 13 Dhara P. Sardhara 17 Disha Patel 21 Jaimin Parmar 25 Jeet Trivedi
1. What is Organization Structure ?
An Organization Structure defines how job tasks or works are formally divided, grouped and coordinated.
An Organization can be structured in many different ways, depending on its objectives.
Managers need to address 6 key elements when they design their organization's structure.
The 6 elements of Organization Structure
1. Work Specialization :
Work should be divided into specialization of the workers. Employees are specialized in different areas as their skills. It creates efficiency and productivity and entire job is not done by one
individual.
2. Departmentalization :
Once jobs have been divided through work specialization, they must be grouped so common tasks can be coordinated. The basis by which jobs are grouped is called “Departmentalization”.
There are many department in every organization like – Functional Departmentalization, Product Departmentalization, Process Departmentalization, Customer Departmentalization.
3. Chain of Command : The unbroken line of authority that extends from the top of the organization to the lowest and clarifies who report to whom.
Authority: Refers to the rights inherent in a managerial position to tell people what to do and to expect them to do it.
Responsibility: The obligation to perform any assigned duties.
Unity of command: The management principle that each person should report to only one manager.
4. Span of Control : The number of subordinates a manager can efficiency and effectively direct. Number of subordinates are working under one same manager. The wider or larger span, the more efficient the organization. There is also some kind of drawbacks which are – it is a complex and expensive, only vertical communications, tight supervision and discourage employee autonomy.
5. Centralization and Decentralization :
Centralization: It refers to the degree to which decision making is concentrated at a single point in organization. In centralization, top managers make all the decisions and lower level management only carry out their directives.
Decentralization: It refers to the degree to which most decisions are made by mid-level or lower-level managers, rather than being made centrally by the head of the company.
It is completely opposite of centralization.
6. Formalization : It refers to the degree to which jobs within the organization are standardized.
The extent to which work roles are structured in an organization, and the activities of the employees are governed by rules and procedures.
2. Common Organizational Design
We now turn to three of the more common organizational design which are –
1. The Simple Structure:2. The Bureaucracy: 3. The Matrix Structure:
1. The Simple Structure: It has only direct and vertical relationship
between different level in firm. Simple structures are perhaps the most common form of organization design, primarily because there are more small organizations than large.
C.E.O
Production
Manager
Foreman
Workers
Foreman
Workers
Marketing Manager
Sale Officer
Sales Person
Sale Officer
Sales Person
Advantages :
Tends to simplify and clarify authority, responsibility and accountability relationship
Promotes to fast decision making
Simple to understand
Disadvantages :
Neglects specialist in planning
Overload key persons.
As the firm grows larger, line organization becomes more ineffective .
2. Bureaucratic Structure : It is an organizational from that exhibits many of the facets of the mechanistic organization.
Designed for efficiency and rely on high levels of work specialization, formalization, centralization of authority, rigid and well-defined chains of command, and relatively narrow span of control.
C.E.O
Marketing
Foreman
Foreman
Foreman
Foreman
Finance
Foreman
Foreman
Foreman
Foreman
Production
Foreman
Foreman
Foreman
Foreman
H.R
Foreman
Foreman
Foreman
Foreman
Advantages : High Specialization
Rigid Departmentalization
Clear chain of command
Narrow span of control
Centralization
High formalization
3. The Matrix Structure: Matrix is a structure that creates dual lines of authority and combines functional and product departmentalization.
Head R&D
Head Productio
n
Head Marketin
g
Head Finance
General Manager
Venture Manager 1
Venture Manager 1
Venture Manager 1
Venture Manager 1
R&DSpecialis
tsR&D
Specialists
R&DSpecialis
tsR&D
Specialists
Production
Specialists
Marketing
Specialists
FinanceSpecialis
tsProductio
n Specialist
s
Production
Specialists
Production
Specialists
Marketing
SpecialistsMarketing
SpecialistsMarketing
Specialists
FinanceSpecialis
tsFinanceSpecialis
tsFinanceSpecialis
ts
Strengths :1. Facilitates Coordination2. Complex and independent
activity 3. Better communication4. More Flexibility5. Efficient allocation of specialists6. Economies of scale
Weakness :
1. Confusion created2. Stress placed on workers3. Increased ambiguity4. Unclear reporting relationships5. Power struggles6. Role conflicts7. Unclear expectations
3.New design options in organizational structure
VIRTUAL ORGANISATIONS MEANING
not physically existing as such but made and connected by software.
‘virtual organization’ also known as digital organization, network
organization or modular organization.
A virtual organization is a “business without walls”
FEATURES VIRTUAL ORGANISATIONS
One is the choice of team members with the appropriate
skills and knowledge for the task
second is the effective linking of team members,
including communication channels, interactions, and
relationships
Advantages & Disadvantages
+ - Increased productivity
Less paperwork
Can be quickly reshaped
Money saved
Abilities to work at home
Difficult to control
Technologies can be easily
revealed.
Boundary less Organization
Seek to remove vertical, horizontal, and external barriers so that employees, managers, customers, and suppliers can work together, share ideas , and identify the best course for the organization.
Types of Boundary less organization
Vertical Boundaries Horizontal Boundaries Geographic Boundaries
VERTICAL BOUNDARIES :-It divide management from employees & divide layers of management from each other.
HORIZONTAL BOUNDARIES :- It divide divisions & departments within a corporation from each other.
Geographic Boundaries :-the boundary less organization also breaks down geographic barriers. Coca-Cola and McDonald’s, do as much business overseas as in the United States . the goal is to break down cultural barriers.
The Leaner Organization: Downsizing
Leaner organizational structure :-
is a structure that is designed to create more customer value using fewer resources than a traditional organizational structure. The goal for all members of an organization that utilizes a lean structure is to constantly find ways to improve the processes of the organization and to make the organization more efficient.
Diff between traditional org & lean org
What is Downsizing?
A downsizing strategy reduces the scale (size) and scope of a business to improve its financial performance.
4. Why Do Structure Differ ?
Models :
The Organic Model1. Cross-functional team2. Cross-hierarchical teams3. Free flow of information4. Wide span of control5. Decentralization6. Low Formalization
The Mechanistic Model
1. High Specialization2. Rigid Departmentalization3. Clear chain of command4. Narrow span of control5. Centralization6. High formalization
Reasons :
Organizational Strategy
Organizational Size
Technology
Environment
1. Organizational Strategy : Structure To achieve objectives Desire from organizational overall strategy Structure – Strategy
Types of Strategy : Innovation Cost Minimization Imitation
1. Innovation :A strategy that emphasizes the introduction of
major new product and services.
2. Cost Minimization : A strategy that emphasizes high cost
controls, avoidance of unnecessary innovation or marketing expenses and price cutting.
3. Imitation : A strategy that seeks to move into new product or new market
only after their viability has already been proven.
The Strategy – Structure Relationship
StrategyStructure Option
Innovation Organic : A loose structure; low
specialization, low formalization,
decentralized
Cost MinimizationMechanistic : Tight control; extensive work
specialization, high formalization, high
centralization
ImitationMechanistic and organic : Mix of loose
with tight properties; tight controls over
current activities and looser controls for new
undertakings
2. Organizational Size
2000
Specialization
Departmentalization
Vertical Levels
Rules and Regulations
2000+
500 =
Mechanistic
300+
500 =
More Mechanistic
3. Technology The way in which an organization transfers its in puts into outputs.
4. Environment Institutions or forces outside an organization that potentially affect the
organization’s performance.
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