Organizational Structure Overview

Organizational Structure

• Organizational structure is a system that outlines how activities are directed to achieve organizational goals, including rules, roles, and responsibilities.
• It determines how information flows between levels in a company.
• Decentralized systems provide individuals a high level of agency, while centralized structures have a defined chain of command.
• Importance of Organizational Structure:
  • Delegation of duties
  • Efficiency and clarity
  • Focused and productive departments
  • Clear delegation of duties and expectations.

Types of Organizational Structure

• Functional (bureaucratic):
  • Divides the firm into departments like marketing, sales, and operations.
• Divisional or Multidivisional (M-Form):
  • Common among large companies with multiple business units.
  • Leadership team uses structures based on products, projects, or subsidiaries.
• Team-Based:
  • Employees segregated into teams serving specific goals and functions, similar to divisional structures.
• Flat (Flatarchy):
  • Known as horizontal structure, used by many startups.
• Matrix:
  • Employees have duties in multiple areas, like sales and customer service.
• Circular:
  • Hierarchical and circular, placing higher-level employees and managers at the center.
• Network:
  • Organizes contractors and third-party vendors for key functions.

Business Process Improvement (BPI)

• A systematic approach to improving organizational processes by optimizing workflows to enhance efficiency and achieve organizational goals.
• Identifies, analyzes, and improves existing business processes to optimize performance, enhance company standards, and improve system quality.
• Benefits:
  • Reduced Costs
  • Improved Income
  • Enhanced Quality
  • Reduced Processing Time
  • Improved Accuracy and Efficiency
• Why Use BPI?
  • Increased Productivity
  • Reduced Costs
  • Improved Quality
  • Attracts Customers
  • Reduced Risk
• Why Do BPI Fail?
  • Lack of Responsibility
  • Complexity
  • Inability to Modify the Plan
• BPI Process:
  • Identify the Problem
  • Map the Process
  • Analyze the System
  • Redesign
  • Implement
  • Review
• Common BPI Methodologies
  • Lean
  • Total Quality Management (TQM)
  • Six Sigma
  • Kaizen
  • Business Process Reengineering (BPR)

Total Quality Management (TQM)

• A business improvement methodology suited for a constantly changing environment.

Six Sigma

• A disciplined, data-driven approach to eliminating defects in any process.
• "Sigma" measures how far a process deviates from perfection.
• Father of Six Sigma: Bill Smith
• Objectives:
  • Overall Business Improvement
  • Reduce Costs
  • Increase Customer Satisfaction
  • Improve Time Cycle
  • Remedy Defects/Variability
• Methodologies:
  • DMAIC (Define, Measure, Analyze, Improve, Control)
  • DMADV (Define, Measure, Analyze, Design, Verify)
• Six Sigma Belt Colors: White, Yellow, Green, Black, Master

Kaizen

• A Japanese philosophy focusing on gradual improvement of productivity and efficiency in the work environment.
• Key Principles: Eliminate, Change, Simplify, Improve
• PDCA Cycle (Plan, Do, Check, Act): Continuous improvement

Business Process Reengineering (BPR)

• A radical redesign of business processes to achieve dramatic improvements in productivity, cycle time, quality, and employee/customer satisfaction.
• Key Elements:
  • Fundamental Rethinking
  • Radical Design
  • Dramatic Improvement
  • Focus on Core Processes
• BPR Cycle:
  • Define Business Process
  • Analyze Business process
  • Identify and Analyze Improvement Opportunities
  • Design Future Processes
  • Develop Future State Changes
  • Implement Future State Changes
• Benefits of BPR:
  • Cost Reduction
  • Improved Productivity
  • Better Customer Service
  • Increased Agility

The Role of Information Technology in Process Optimization

• Business process optimization involves analyzing and improving workflows to eliminate bottlenecks, reduce costs, and enhance productivity.
• Technology provides powerful tools and solutions for streamlining operations and unlocking efficiency.

Business Processes

• A series of structured activities or tasks performed by organizations to achieve a specific goal or deliver a product/service.
• Three main types:
  • Core Processes (delivering products/services)
  • Support Processes (enabling core processes)
  • Management Processes (governing the organization)

Business Process Optimization

• Analyzes and improves workflow within an organization to enhance efficiency, reduce costs, and increase productivity.

Organizational Development (OD)

• Focuses on enhancing performance, managing change, continuous learning, employee engagement, and strategic alignment.

Early Foundations of Organizational Development

• Early Foundations (1900s-1930s): Focused on organizational development, improving efficiency and productivity through systematic analysis.
• Frederick Winslow Taylor (Father of Scientific Management): Contributed to this early stage of organizational development.
• Human Relations Movement (1930s-1950s): Focus on people. Founded by George Elton Mayo.
  • Led to the Hawthorne Studies, experiments exploring the impact of social factors on worker productivity.
  • Abraham Maslow: Introduced the Hierarchy of Needs theory in his "A Theory of Human Motivation".
  • Kurt Lewin: Psychologist known for contributions to social, organizational, and applied psychology.

Emergence of Organizational Development

• Emergence of OD (1950s-1960s): Formal emergence of OD as a distinct field.

Growth and Formalization of Organizational Development

• Growth and Formalization (1960s-1980s): Laid the foundation for modern OD practices. Focused on systems thinking, tailored interventions, and continuous learning.

Systems Thinking and the Learning Organization

• Systems Thinking and the Learning Organization (1980s-1990s): Emphasized a holistic approach to analysis, focusing on how systems work in the context of larger systems.

The Rise of Change Management

• The Rise of Change Management (1990s-2000s): Organizations became more focused on planned and managed organizational change.

Contemporary Organizational Development

• Contemporary OD (2000s-Present): Continuously evolving, incorporating new approaches and technology.

SWOT Analysis and PESTLE Analysis

• SWOT Analysis:*
• Strengths:
  • Strong Brand Recognition
  • Skilled Workforce
  • Robust Financial Position
• Weaknesses:
  • Limited Digital Presence
  • Inefficient Processes
  • High Employee Turnover
• Opportunities:
  • Market Expansion
  • Technological Advancements
  • Sustainability Initiatives
• Threats:
  • Intense Competition
  • Regulatory Changes
  • Economic Uncertainty
• PESTLE Analysis:*
• Political Factors:
  • Regulatory Framework
  • Government Stability
• Economic Factors:
  • Market Conditions
  • Global Trade Policies
• Social Factors:
  • Changing Consumer Preferences.
  • Sustainability Concerns

Explore the key concepts of organizational structure, including its importance and different types such as functional, divisional, and team-based systems. This quiz will help you understand how organizational frameworks guide the flow of information and responsibilities within a company.