Organization Structure

Networked arrangement of positions and departments though which tasks of an enterprise are carried out.

Purpose of orgn.
Purpose of orgn. is to encourage behaviors appropriate to goal and task needs.

Steps in Structuring
Identify and list activities to be performed to achieve objectives and strategies of an organization Group the activities requiring same/similar skills together to form jobs Divide the jobs into individual positions so that a person can comfortably carry out the responsibilities of his/her position Create supervisory positions considering span of control Arrange supervisory positions in hierarchy considering chain of command Group the positions into units, units into sections/ sections into departments , departments into division.. Consider degree of decentralization Draw an organization chart

Organization Chart
The symbolic structure of boxed titles and lines that represent positions and reporting relationships.

Organization Design
The process of creating structure assigning responsibilities and structuring work for supporting objectives and strategies. Designing an organization involves deciding how the enterprise should be managed and led as well as creating structure to subdivide and allocate tasks .

Organization Design provides for

1. Dividing and grouping of taska 2. Networks to convey info. 3. A structure to locate decision centres for, or authority 4. Processes for coordination, control and conflict resolution 5. The means to link key work units with appropriate external stake holders

4 basic designs
1. 2. 3. 4. Design by function Design by geography Design by product line Design by customer/ market channel

Design by function
Groups people into depts. Or subunits based on similar skills, expertise , and functions performed Design, Production, Marketing Best when orgn. Is small or has single product line. Adv.: encourages specialization >>efficiency, innovation Disadv. : Tunnel vision, conflict & protection of turf

Design by geography
Groups activities based on location. For example- Northern region, Eastern region etc.. Best when serving the needs of an a region/territory is important & coordination of local activities is urgent Adv.:Local adaptation facilitated Disadv. :consistency of service and image may be affected

Design by Product line

Groups activity cents based unique product/service each centre provides. For example- plastic furniture, metal furniture, wooden furniture. Best when serving the specific needs of each product/product line Adv.:Each unit can be organized, staffed and equipped keeping the specific needs of the product. Disadv. :Difficulty in coordinating related activities across business units.

Design by customer/ market channel

Groups activities based on types of customers or distribution channels. For example- Direct customers, Retail customers, Institutional customers Best when serving the unique needs of a distinct set of customers Adv.: enables focus on the unique requirements of the customers Disadv. :requires duplication of services and facilities to serve different sets of customers.

Integrated design
An enterprise may combine more than one design to support realization of objectives and strategies

Matrix Orgn. The hybrid

Members of a matrix orgn. are drawn from the functional depts. and are placed under the supervision of a line manager. Incorporates dual responsibilities and reporting relationships with specific project or product.

Organization design- Act of compromise & balancing

Each of the basic orgn. design has advantages and disadvantages. Orgn. Design requires striking a balance among opposing forces, needs and goals.

Balancing centralization and decentralization

centralization concentrating authority and decision making towards the top of the orgn. May work for small orn. & orgns. operating in stable environment Decentralization- disperses authority and decision making to operating units throughout the organization. Large orgns. With competent employees tend to be decentralized. So also orgns. operating in uncertain and complex env. To promote local adaptability and decision-making

autonomy and control

Autonomy means granting power and responsibility to followers to initiate innovative action that improves processes and performance with results assessed against goals. Pushes decisions to those who are closest to the action, who have information, with expectation that people will accept responsibility for producing favorable results.

Control :
Control : limits the authority given to managers to shape decisions and resource allocations by specifying parameteres and providing for higher level reviews and often approvals. Emphasizes consistency of actions

Balancing autonomy and control

autonomy and control conflict is a choice between maintaining consistency and predictability , and promoting innovation and flexibility. Control is prevalent Production dept. Autonomy given to marketing dept.

Balancing Differentiation and Integration

Differentiation; Do people identify themselves more with their dept., function or discipline , or with the larger enterprise? If so, differentiation is present. Promotes specialization and functional expertise. Integration: A psychological orientation that identifies with the big picture perspective of the larger enterprise. Promotes synergy and coordination. It reflects quality and form of collaboration among sub units. Ultimately, it is the coordination and combination of action across sub units that is of greater importance School vs. Dept./discipline orientation.

Mechanistic Vs. Organic structure

Mechanistic Organization is highly structured and formalized, leading to conforming behaviors to handle routine function in a stable environment.

Bureaucracy
Is an efficiency oriented systm of organization that emphasizs formalization of roles and rules to promote control. It s pyramid shaped and structured on a rational-legal system of authority. It can be work well when routine operations are fitted together to stable, predictable env.

Organic structure
Empowers individuals and teams to pursue continuous improvement through adaptation. Appropriate in complex, fast changing env. Specially when technology is a driving force. Promotes high involvement, which helps people provide high quality product at competitve cost

Span of control
Refers to number of subordinates supervised by a manager. Narrow span (fewer subordinates) increases of levels of supervision and makes orgn. Pyramidical. Flat orgn. Promotes involvement