Organizational Structure PDF

ORGANIZATIONAL STRUCTURE AND SYSTEMS ORGANIZATION It is a goal -directed social entity with deliberate processes and systems It is a collection of people working togetherto accomplish something better than they could working separately Social actors (influences or being influenced b...

ORGANIZATIONAL STRUCTURE AND SYSTEMS ORGANIZATION It is a goal -directed social entity with deliberate processes and systems It is a collection of people working togetherto accomplish something better than they could working separately Social actors (influences or being influenced by the environment ORGANIZATION STRUCTURE It is the system of task, reporting, authority relationships within which the work of the organization is done. it defines how the parts of an organization fit together, as is evident in the organizational chart  An organizational chart shows the internal structure of an organization or company. Importance: It helps employees identify their function within the organization. It helps employees to understand the goals and aims of the organization It outlines how activities, supervision, and coordination work towards the achievement of organization’s goals TYPES OF ORGANIZATIONA STRUCTURES Hierarchichal Functional Horizontal Divisional (market based, product-based, geographical Matrix Team-based Network Hierarchical Organizational Structure A hierarchical structure is typical for larger businesses and organisations. It relies on having different levels of authority with a chain of command connecting multiple management levels within the organisation. The decision-making process is typically formal and flows from the top down. Hierarchical Organizational Structure Advantages: Better defines levels of authority and responsibility Shows who each person reports to or who to talk to about specific projects Motivates employees with clear career paths and chances for promotion Gives each employee a specialty Creates camaraderie between employees within the same department Hierarchical Organizational Structure Disdvantages: Can slow down innovation or important changes due to increased bureaucracy Can cause employees to act in interest of the department instead of the company as a whole Can make lower-level employees feel like they have less ownership and can’t express their ideas for the company Functional Oganizational Structure A functional organizational structure is a team structure that groups employees into different departments based on areas of expertise. This type of structure is one of the most common types in business, especially in larger companies, where groups of employees are organized according to the function they perform. Functional Oganizational Structure Advantages Allows employees to focus on their role Encourages specialization Help teams and departments feel self- determined Is easily scalable in any sized company Functional Oganizational Structure Disadvantages Can create silos within an organization Hampers interdepartmental communication Obscures processes and strategies for different markets or products in a company Horizontal or Flat Organizational Structure Organizations with these structures often have few managers with many employees, and they allow employees to make decisions without needing manager approval. Many start-up businesses use a horizontal org structure before they grow large enough to build out different departments, but some organizations maintain this structure since it encourages less supervision and more involvement from all employees. Horizontal or Flat Organizational Structure Advantages: Gives employees more responsibility Fosters more open communication Improves coordination and speed of implementing new ideas Horizontal or Flat Organizational Structure Disadvantages: Can create confusion since employees do not have a clear supervisor to report to Can produce employees with more generalized skills and knowledge Can be difficult to maintain once the company grows beyond start-up status Divsional Organizational Structure The divisional structure is based on segmentation by products, markets, or geographical variations and is well-suited for larger companies dealing with multiple products and markets. Independent divisions operate autonomously under the supervision of the head office, with divisional managers overseeing functional units and having final authority over them. Divisional Organizational Structure Advantages: Helps large companies stay flexible Allows for a quicker response to industry changes or customer needs Promotes independence, autonomy, and a customized approach Divsional Organizational Structure Disadvantages: Can easily lead to duplicate resources Can mean muddled or insufficient communication between the headquarters and its divisions Can result in a company competing with itself Divsional Organizational Structure Market-based - divisions are separated by market, industry, or customer type. (eg supermarket) Product-based - Divisions are separated by product line. eg. a tech company might have a division dedicated to its cloud offerings, while the rest of the divisions focus on the different software offerings—e.g., Adobe and its creative suite of Illustrator, Photoshop, InDesign, etc. Divsional Organizational Structure Geoographical - Divisions are separated by region, territories, or districts, offering more effective localization and logistics. Companies might establish satellite offices across the country or the globe in order to stay close to their customers. Matrix Organizational Structure A matrix structure is a combination of two or more types of organisational structures. It is a way of arranging your business so that you set up reporting relationships as a grid, or a matrix, rather than in the traditional hierarchy. Matrix Organizational Structure Advantages: Allows supervisors to easily choose individuals by the needs of a project Gives a more dynamic view of the organization Encourages employees to use their skills in various capacities aside from their original roles Matrix Organizational Structure Disadvantages: Presents a conflict between department managers and project managers Can change more frequently than other organizational chart types Team-based Organizational Structure Team-based organizational structures are made of teams working towards a common goal while working on their individual tasks. They are less hierarchical and they have flexible structures that reinforce problem-solving, decision-making, and teamwork. Team-based Organizational Structure Advantages: Increases productivity, performance, and transparency by breaking down silo mentality Promotes a growth mindset Changes the traditional career models by getting people to move laterally Values experience rather than seniority Requires minimal management Fits well with agile companies with Scrum or tiger teams Team-based Organizational Structure Disadvantages: Goes against many companies’ natural inclination of a purely hierarchical structure Might make promotional paths less clear for employees Network Organizational Structure A network organizational structure is one in which organizations group certain types of employees together based around a common specialization. These employees then form partnerships with other specialists from throughout the organization to take on new projects and work toward a common goal. Network Organizational Structure Advantages: Visualizes the complex web of onsite and offsite relationships in companies Allows companies to be more flexible and agile Give more power to all employees to collaborate, take initiative, and make decisions Helps employees and stakeholders understand workflows and processes Network Organizational Structure Disadvantages: Can quickly become overly complex when dealing with lots of offsite processes Can make it more difficult for employees to know who has final say Elements of Organizational Structure Division of labor Coordinating Divided Tasks Departmentalization Span of Control Administrative hierarchy Elements of Organizational Structure Division of labor it is the extent to which the organization’s work is separated into different jobs to be done by different individuals it is also called specialization Advantages and Disadvantages of Division of Labor Advantages Disadvantages Efficient use of labor Routine, repetitive jobs Reduced training costs reduced job satisfaction Increased standardization and uniformity of decreased worker involvement and output commitment increased expertise from repetition of tasks increased worker alienation. possible incompatibility with computerized manufacturing technogies Elements of Organizational Structure Coordinating Divided Tasks divided tasks must be well coordinated Integration. It is the process of coordinating the various tasks and roles to achieve goal accomplishment Elements of Organizational Structure Departmentalization It is the manner in which divided tasks are combined and allocated to work groups Five most common groupings: business function (internal operations) process (internal) product or service (external) customer (external) geography (external) Elements of Organizational Structure business function - based on traditional business functions (marketing, manufacturing and human resource administration) employee can learn from one another lacks autocratic mechanisms for coordinating the flow of work through organizatiom Elements of Organizational Structure Process departmentalization similar to functional yet the focus is more on specific jobs grouped according to activity process grouping encourages specialization and expertise among employees, who tend to concentrate on a single operation and share information with the departmental colleagues develops into an internal career path Elements of Organizational Structure Product or service departmentalization it occurs when employees who work on a particular product or service are members of the same department regardless of their business function or the process in which they are engaged in it enhances interaction and communication among employees who produce the same product or service may reduce coordination problems employees may become son interested in their product or service that they miss technological improvements or innovation Elements of Organizational Structure Customer departmentalization also called departmentalization by market less process specialization offers best coordination of workflow tailored to the customers needs isolates employees to their expertise Elements of Organizational Structure Span of Control it is the number of people reporting to a manager, it defines the size of the organization’s work group it is also called span of management small span of control = close supervision Elements of Organizational Structure Mintzberg’s five conditions in determining span of control: 1. coordination requirements within the unit , including factors such as degree of specialization 2. similarity of tasks unit 3. type of information available or needed unit by members 4. differences in the members need for autonomy 5. extent to which the members need direct access to supervisors Elements of Organizational Structure Administrative Hierarchy (administrative intensity or administrative ratio) it is the system of reporting relationships in the organization, from first level up through the president or the CEO the size of the administrative hierarchy is inversely proportional to the span of control it relates with the overall size of the organization