Organisation structure
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Organisation Structure PowerPoint PPT Presentation


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Organisation Structure. Hierarchy type Organisational Structure. Flat type Organisational Structure. Pros and Cons of Different Structures. This depends on the business type, size and structure used Let’s look at a functional structure:. Chief Executive. Board of Directors. Production.

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Organisation Structure

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Organisation structure

Organisation Structure


Organisation structure

Hierarchy type Organisational Structure

Flat type Organisational Structure


Pros and cons of different structures

Pros and Cons of Different Structures

  • This depends on the business type, size and structure used

  • Let’s look at a functional structure:

Chief Executive

Board of Directors

Production

Marketing

Accounts

Personnel

IT


Functional structure

Advantages

Disadvantages

Functional Structure

  • Specialisation – each department focuses on its own work

  • Accountability – someone is responsible for the section

  • Clarity – know your and others’ roles

  • Closed communication could lead to lack of focus

  • Departments can become resistant to change

  • Coordination may take too long

  • Gap between top and bottom


An example of organisation by product activity

An Example of Organisation by Product/Activity

Hewlett Packard

Imaging and

Printing Group

Personal

Systems Group

Enterprise

Systems Group

HP Services

HP Financial

Services


Organisation by product activity

Advantages

Disadvantages

Organisation by Product/Activity

  • Clear focus on market segment helps meet customers’ needs

  • Positive competition between divisions

  • Better control as each division can act as separate profit centre

  • Duplication of functions (eg different sales force for each division)

  • Negative effects of competition

  • Lack of central control over each separate division


Organisation by area

Organisation by Area

Hewlett Packard

Hewlett-Packard’s Headquarters Worldwide

Americas

Houston, Texas

Europe, Middle East, Africa

Geneva, Switzerland

Asia Pacific

Hong Kong


Organisation by area1

Advantages

Disadvantages

Organisation by Area

  • Serve local needs better

  • Positive competition

  • More effective communication between firm and local customers

  • Conflict between local and central management

  • Duplication of resources and functions


Illustrating structures 1

Illustrating Structures 1

The Pyramid

Traditional view of organisations

Decisions pass down formal channels from managers to staff

Information flows up formal channels from staff to management


Illustrating structures 2

Illustrating Structures 2

Entrepreneurial

Key worker

Key worker

Quick to act but pressure on decision makers

One or two people make decisions

Most small businesses have this structure

Decision maker

Great reliance on key workers supporting decision makers

Key worker

Key worker


Illustrating structures 3

Illustrating Structures 3

Matrix

Marketing

Production

Finance

Project A

Project teams created

Staff with specialist skills

Project B


Illustrating structures 4

Illustrating Structures 4

Independent

Not suited to most businesses due to lack of control

Dr A

Dr B

Support systems to professionals such as doctors

Dr C

Dr D


More on business structure

Centralisation

Decentralisation

More on Business Structure

  • Managers keep control

  • Decisions are made in the interests of the whole business

  • Costs can be cut by standardising purchasing and so on

  • Strong leadership

  • Empowering and motivating

  • Freeing up senior managers’ time

  • Better knowledge of those closer to customers

  • Good staff development


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