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    Lecture 2 Organisational Structure Final

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    Huong Diem Nguyen
    The document discusses different types of organization structures including functional, divisional, matrix, geographic, horizontal, virtual networks, and hybrid structures. It describes the key components and considerations of organization structure including vertical and horizontal linkages, departmental grouping options, and how structure can impact information flow, decision making, and employee behavior. The purpose of an organization structure is to provide a framework that links the organization together and encourages effective communication and coordination across the entity.

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    Lecture 2 Organisational Structure Final

    Uploaded by

    Huong Diem Nguyen
    122 views43 pages
    The document discusses different types of organization structures including functional, divisional, matrix, geographic, horizontal, virtual networks, and hybrid structures. It describes the key components and considerations of organization structure including vertical and horizontal linkages, departmental grouping options, and how structure can impact information flow, decision making, and employee behavior. The purpose of an organization structure is to provide a framework that links the organization together and encourages effective communication and coordination across the entity.

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    The document discusses different types of organization structures including functional, divisional, matrix, geographic, horizontal, virtual networks, and hybrid structures. It describes the key components and considerations of organization structure including vertical and horizontal linkages, departmental grouping options, and how structure can impact information flow, decision making, and employee behavior. The purpose of an organization structure is to provide a framework that links the organization together and encourages effective communication and coordination across the entity.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    122 views43 pages

    Lecture 2 Organisational Structure Final

    Uploaded by

    Huong Diem Nguyen
    The document discusses different types of organization structures including functional, divisional, matrix, geographic, horizontal, virtual networks, and hybrid structures. It describes the key components and considerations of organization structure including vertical and horizontal linkages, departmental grouping options, and how structure can impact information flow, decision making, and employee behavior. The purpose of an organization structure is to provide a framework that links the organization together and encourages effective communication and coordination across the entity.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 43
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    The document discusses several topics related to management practices across many pages.

    The main topics discussed include strategies, processes, metrics and organizational structure.

    Each topic provides details about objectives, implementation approaches and outcomes.

    Fundamentals of Organization Structure

    Define Structure - The way in which people work together ? Define Culture - The way in which people work together ?
    So what is the difference ?

    Think of some words that might describe Structure and some words that might describe Culture

    Structure Vs Culture
    Structure
    Firm Clear Distribution of Authority that helps define how people work together

    Culture
    Soft Intangible Norms and Values that help define how people work together

    Organization Structure
     Three key components  Vertical aspect of organizing - Formal Reporting Relationships including the number of levels and the span of control. - Grouping of Individuals into departments and of departments into the total organization  Horizontal aspect of organizing - Design of Systems to ensure effective communication, coordination and integration of efforts

    A Sample Organization Chart

    Formal Organisational Structures


     Grouping of activities  Responsibilities of individuals  Reporting relationships  Levels of authority  Span of control - (Flatter Structures)  Systems of communication  Degree of delegation of authority But also Underlying activities and processes

    Information-Processing Perspective on Structure


     Provide Vertical and horizontal information flow  Traditional organization vs. Learning organization - Traditional organization design emphasizes vertical communication and control. - Learning organization which emphasizes communication and collaboration  Centralized vs. Decentralized decision making - Centralized authority focused on top level decision-making - Decentralized authority focused on shared tasks and decisions

    Efficiency versus Learning Outcomes

    Effect of Structure on People - (R. Stewart - The reality of management )


    People modify the working of the formal organisation, but their behaviour is also influenced by it. The method of work organisation can determine how people relate to one another, which may affect both their productivity and morale. Managers, therefore, need to be conscious of the ways in which methods of work organisation, may influence people s attitude and action.

    Vertical Information Sharing


     Vertical linkages coordinate activities between the top and the bottom of the organization  Hierarchical referral are the vertical lines which identify the chain of command  Rules and Plans - Rules enabling employees to be coordinated - Plans provides standing information for employees.  Vertical information systems is a strategy for increasing vertical information capacity. It includes reports, computer-based communication and written information

    Horizontal Information Linkages


     Horizontal linkage refers to the amount of communication and coordinate activities across organizational departments.  Information Systems enable information exchange throughout the organization  Direct Contact is a higher level of horizontal linkage (i.e. liaison role)  Task Forces is a temporary committee composed of representative from each department involved.  Full-Time Integrator responsible for coordination.  Teams is the strongest horizontal linkage.

    Ladder of Mechanisms for Horizontal Linkages

    Organization Design Alternatives


        Three keys indicators of organization design Required work activities Reporting relationships Departmental grouping options - Functional grouping - Divisional grouping - Multi-focused grouping - Horizontal grouping - Virtual network grouping

    Departmental Grouping Options

    Functional Grouping

    Divisional Grouping

    Multifocused Grouping

    Horizontal Grouping

    Virtual Network Grouping

    Functional Structure
    Strengths
     Allows economies of scales within functional departments  Enables in-depth knowledge and skill development  Enables organizations to accomplish functional goals  Is best with only one or a few products

    Weaknesses
     Slow response time to environmental changes  May cause decisions to pile on top, hierarchy overload  Leads to poor horizontal coordination  Results in less innovation  Involves restricted view of goals

    Divisional Structure
    Strengths
     Suited to fast change in unstable environment  Leads to customer satisfaction  Involves high coordination  Allows units to adapt to differences  Best in large organizations with several products  Decentralizes decision making

    Weaknesses
     Eliminates economies of scale in functional departments  Leads to poor coordination  Eliminates in-depth competence and technical specialization  Makes integration and standardization across product lines difficult

    Functional vs. Divisional Structure -Example

    Geographic Structure
     Organizing to meet needs of users/customers by geography  It is particular common in large nonprofit organizations  Many multinational corporations are organized by country  Focuses managers and employees on specific geographic regions  Strengths and weaknesses similar to divisional organization

    Sample Geographic Structure

    Matrix Structure
     Conditions for Matrix: - Condition 1: Share resources across the organization - Condition 2: Two or more critical outputs required: products and technical knowledge - Condition 3: Environment is complex and uncertain Two variations of matrix structure - functional matrix - product matrix A dual-authority structure can help to ensure a balance between vertical and horizontal aspects of organizations.

    Matrix Structure
    Strengths
     Achieves coordination to meet dual demands  Flexible sharing of human resources across products  Suited to complex decisions and unstable environment  Promote functional and product skill development  Best in medium-sized organizations with multiple products

    Weaknesses
     Dual authority cause confusion  Need good interpersonal skills and extensive training  Time consuming  Need common understanding among participants  Requires great effort to maintain power balance

    Sample Matrix Organization

    Matrix structure of ULYSSES


    To ensure the optimal use of the results beyond the participants, the partnership is an open structure allowing other partners to join the meetings/activities depending on the interests represented by new projects.

    http://ec.europa.eu/research/transport/projects/items/ulysses_en.htm

    Horizontal Structure
     Organization around core processes.  Key characteristics: - Structure is created around cross-functional processes - Self-directed teams are the basis of organization design and performance - Process owners are responsible for entire process - People on the team are given authority for decisions - Can increase organization s flexibility - Customers drive the horizontal corporation. - The culture promotes openness, trust and collaboration.

    Horizontal Structure
    Strengths
     Promote flexibility and rapid response to changes  Focus on the production and delivery of value  Each employee has a broader view of organization goals  Promotes a focus on teamwork and collaboration  Improves quality of life for employees

    Weaknesses
     Determining core processes is difficult and time consuming  Requires many changes  Traditional managers may baulk when they have to give up power and authority  Requires significant training of employees  Can limit in-depth skill development

    Sample Horizontal Structure

    Virtual Networks and Outsourcing


     It extends the concept of horizontal coordination and collaboration beyond the boundaries of the organization  Most common strategy is outsourcing - Contract out certain tasks/functions  Virtual or modular structures subcontract most of its major functions to separate companies  The virtual network organization serves as a central hub with contracted experts

    Virtual Network Structure


    Strengths
     Enables organizations to obtain talent and resources worldwide  Gives a company immediate scale and reach without huge investments  Enables the organization to be highly flexible and responsive to changing needs  Reduces administrative cost

    Weaknesses
     Managers do not have hands-on control over many activities and employees  Requires a great deal of time to manage relationships  Risk of organizational failure  Employee loyalty and corporate culture might be weak

    Hybrid Structure
     Organizations often use a hybrid structure that combines characteristics of various structure approaches tailored to specific needs  One common type is the combination of the functional and divisional structures.  Often used in rapidly changing environments  Greater flexibility

    Application of Structural Design


     Each type of structure is applied in different situations and is intended to meet different needs.  Structural alignment aligns structure with organizational goal  Symptoms of Structural Deficiency: Decision making is delayed or lacking quality Organization does not respond innovatively to a changing environment Employee performance declines, goals are not being meet Too much conflict

    Application of Structural Design

    Summary and Interpretation


     Structure must provide a framework, linking organization into whole  Provide vertical and horizontal linkages  Variety of alternatives for grouping  Virtual network extends horizontal coordination  Matrix structure attempts to achieve balance between the vertical and horizontal dimensions of structure.  Managers must find right balance  The purpose of the organization chart is to encourage and direct activities

    AQUARIUS Advertising Agency


    Analyze Aquarius with respect to the five contextual variables. How would you describe the environment, goals, culture, size, and technology for Aquarius? Design a new organization structure that takes into consideration the contextual variables in the case and the information flows. Would a matrix structure be feasible for Aquarius? Why or why not?

    The Learning Organisation

    Collective Policy Operations

    Ideas Individual

    Action

    Ideas, thoughts, plans

    Actions, doing, behaviour

    Reproduced from J. Burgoynes article Feeding minds to grow the business People management 21 Sep. 1995

    The Learning Organisation


    Is it this way round ? Ideas produce action which eventually becomes operations which then becomes policy which generates ideas etc?

    Collective Policy Operations

    Ideas Individual

    Action

    Ideas, thoughts, plans

    Actions, doing, behaviour

    Reproduced from J. Burgoynes article Feeding minds to grow the business People management 21 Sep. 1995

    The Learning Organisation


    Or is it this way round ? Ideas produce policy which determines operations which drive actions which generate ideas etc.
    Policy Operations

    Collective

    Ideas Individual

    Action

    Ideas, thoughts, plans

    Actions, doing, behaviour

    Reproduced from J. Burgoynes article Feeding minds to grow the business People management 21 Sep. 1995

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