capon: understanding organisational context 2nd edition © pearson education 2004 1.1 understanding...
TRANSCRIPT
1.1Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004
Understanding Organisational Context 2e
Slides by Claire Capon
Chapter 1
Inside organisations Organisational structures
Handy’s cultures
1.2Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004
Organisational structures
The simple structure
1.3Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004
Figure 1.2 The simple structure
1.4Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004
Main features
• Centralised
• Organised around owner
• Small companies or small companies in early stages of development
1.5Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004
Advantages
• Owner controls early growth and development of the business
1.6Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004
Disadvantages
• Owner may lack specialist knowledge in some areas
• Appropriate up to a certain size only
1.7Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004
Organisational structures
The functional structure
1.8Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004
Figure 1.3 The functional structure
1.9Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004
Main features
• Centralised
• Small company producing limited range of products
• Organised around tasks to be carried out
1.10Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004
Advantages
• Simple lines of control
• Efficient lines of communication and information flow - vertical and short
1.11Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004
Advantages (cont.)
• Specialist managers heading up each function
• Improved decision making
1.12Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004
Disadvantages
• Functional managers overburdened with operational duties
• Longer-term planning may be neglected
1.13Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004
Disadvantages (cont.)
• Becomes stretched by growth and product diversification
• Difficult to co-ordinate and manage across different functions
1.14Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004
Organisational structures
The divisional structure
1.15Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004
Figure 1.4 The divisional structure
1.16Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004
Main features
• Product or geographical divisions
• Diverse range of products or services offered, or geographically-diverse markets served
1.17Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004
Advantages
• Divisions are profit centres in their own right
• Decentralised structure - easier to manage diversity
• Divisional managers responsible for short-term and medium-term planning
1.18Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004
Advantages (cont.)
• Top managers are free to concentrate on longer-term planning
• Profitability is spread across the divisions, products and markets
1.19Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004
Disadvantages
• Potential conflict between divisions over resource allocation
• Overall co-ordination of divisions can be difficult
1.20Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004
Organisational structures
The holding company structure
1.21Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004
Figure 1.5 The holding company structure
1.22Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004
Main features
• Small head office - acts as an investment company
• Decentralised - operating companies are largely independent
1.23Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004
Main features (cont.)
• Operating companies trade under own name, rather than holding company’s name
1.24Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004
Main features (cont.)
• Operating companies are required to meet strict financial targets
• Financial and legal sections support head office, not the operating companies
1.25Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004
Advantages
• Low central overheads
• Risk and profit are spread
• Ease of divestment of operating companies
1.26Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004
Disadvantages
• Individual operating companies under risk of divestment by holding or parent company - may feel threatened
• No centralised skills
1.27Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004
Disadvantages (cont.)
• Potential lack of overall co-ordination and direction of the whole organisation
1.28Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004
Organisational structures
The matrix structure
1.29Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004
Figure 1.6 The matrix structure: multinational company
1.30Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004
Main features
• Double definition of profit centres (two arms of the matrix)
• Found in different types of organisation:- large multinationals
- university departments
- sophisticated service companies
1.31Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004
Advantages
• Decentralised and localised decision making in the matrix
• Growth and complexity controlled by people in the matrix
1.32Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004
Advantages
• Direct contact between two arms of the matrix replaces bureaucracy
• Quality decision making and increased managerial motivation
1.33Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004
Disadvantages
• In the matrix, potentially:
- a high degree of conflict
- a long time to make decisions
- unclear job and task responsibilities
1.34Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004
Disadvantages (cont.)
• Difficult to implement
• High overhead costs
1.35Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004
Handy’s cultures
The power culture
The role culture
The task culture
The person culture
1.36Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004
Figure 1.9 The power cultureSource: Understanding Organizations by Charles Handy (Penguin Books 1976, Fourth Edition 1993). Copyright Charles Handy 1976, 1981, 1985, 1993. Reproduced by kind permission of Penguin Books Ltd.
1.37Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004
The power culture
• Usually found in small firms with simple structure
• Owners tend to recruit employees similar in character to themselves
1.38Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004
The power culture
• The culture is like that of a club with all employees as members
• Power culture is very reliant on the owner
1.39Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004
The power culture
• Work is divided by function or product
• Lines radiating from the centre represent functional or product areas
1.40Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004
The power culture
• Concentric circles represent power and influence
• The further away from the centre, the weaker the power and influence
1.41Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004
Figure 1.10 The role cultureSource: Understanding Organizations by Charles Handy (Penguin Books 1976, Fourth Edition 1993). Copyright Charles Handy 1976, 1981, 1985, 1993. Reproduced by kind permission of Penguin Books Ltd.
1.42Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004
The role culture
• Often found in larger organisations with functional or divisional structure
• Built around defined jobs, roles and procedures
1.43Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004
The role culture
• Strength of organisation is in the pillars or departments
• Designed for stability and continuity
• Not adaptive to change
1.44Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004
Figure 1.11 The task cultureSource: Understanding Organizations by Charles Handy (Penguin Books 1976, Fourth Edition 1993). Copyright Charles Handy 1976, 1981, 1985, 1993. Reproduced by kind permission of Penguin Books Ltd.
1.45Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004
The task culture
• Often found in organisations with the matrix structure
• Problem-solving organisations
1.46Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004
The task culture
• People and resources drawn together into a temporary team for a specific project
• Once the project is completed, the team disbands and individuals move on to other projects
1.47Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004
Figure 1.12 The person cultureSource: Understanding Organizations by Charles Handy (Penguin Books 1976, Fourth Edition 1993). Copyright Charles Handy 1976, 1981, 1985, 1993. Reproduced by kind permission of Penguin Books Ltd.